has anyone thought of running a rpg, but using stats from LOTR game for like the monsters and stuff and a similar system for combat.

example a fellbeast's stats could be used to represent a wyvern or something.
and a captians stats could be used to represent a character/ hero.

and when players gain levels they could maybe like increase one of thier stats by 1.

The only hobby-based rpg I know of that uses stats is Druchii.net's, but they aren't LOTR stats. It's probably been done, but you could always take a look around. A fansite on GW's LOTR might be able to tell you.

a cpu rpg or book rpg?

Why not just buy the middle-earth rpg books from ebay and use the models to play with. It's a lot easier than developing a system to use with a different system's stats.