Willow 2 - could it happen (and should it)?

If you're a child of the '80s like me, chances are you grew up with the movie "Willow." This 1988 fantasy film told the story of Willow Ufgood, a humble farmer who finds himself forced into a battle to save the world. Directed by Ron Howard and written by George Lucas, this film was a dud at the box office when released but has since become a cult favorite. I came across this film in my youth and immediately fell in love with it. Now that I'm an adult I can see that "Willow" is actually a huge rip-off of "The Hobbit" and "The Lord of the Rings," but I still harbor an embarrassingly sincere love for this movie (in part because, unlike Peter Jackson's "Ring" films, this movie features little people characters that are actually played by little people!). That being said, I've never really felt a sequel was necessary. But Warwick Davis, aka Mr. Willow himself, apparently does, because he recently stated in an interview that he would love to revisit the character in another movie ( it should be noted that Davis has gone on to become a very accomplished actor who has starred in dozens of films, including "Star Wars: Return Of The Jedi," "Ray" and multiple roles in the "Harry Potter" films, and has even opened an acting school for little people). Val Kilmer, who also starred in the film as a Madmartigan, an Aragorn-gone-crazy human who teams up with Willow, was asked his thoughts on the sequel but dodged the answer.
In truth, a sequel to the film already does exist: George Lucas collaborated with writer Chris Claremont on a now-forgotten trilogy of books called the "Chronicles Of The Shadow War" that are a direct sequel to "Willow." But trust me, these stories are best left forgotten (if you think people hate the Star Wars prequels, go online and just see how much venom the fanboys throw at this series!). But still, I am now intrigued at the idea of a real (and good) sequel to this classic film. But I have a few demands: 1) cast little people again, 2) come up with a new story that is not related to the crappy books or a rip-off of other famous fantasy properties, and finally 3) do not involve George Lucas in this project. In fact, it'd probably be best if no one told him about it.