It would make for some pretty cool fluff. The only problem is that it's pretty heavily emphasized that they are very feral. They're more like stone-age human tribesmen than anything else, as the Slann are actually sort of "hive minds" for the Skinks/Saurus in their cities. The Skinks are artisans more than fighters, and the Saurus are just bent on warfare, so I'm not even sure how the culture of the Dragon Isles would work out.
My friend is working on a Lizardmen army which lost it's Slann and all of the Skinks during a Skaven Plague (the Saurus being more resistant to the diseases). The Temple has been recorded lost (in official LM fluff) but by his account, it was later discovered that the Saurus had built a strange kind of "death cult" as a result, driven by a background sense of failure and irreconcilable grief at having lost their Slann. Without guidance, and driven by these previously unknown emotions, the Saurus formed their own strange society. Recently, through means unknown, some of the Saurus have even come to possess a measure of skill in the more somber winds of Magic - death and shadow - as well as the more feral wind of Beasts.
As far as the models and such, he's planning to run them all in Temple Guard helmets. The actual temple guard will get some extra ornamentation befitting their station. He still plans to include a Slann in the army, but it will be an older Saurus (with the rounder heads) standing on a Palanquin, with a skull motif on his face with warpaint, reposed, probably holding a staff (he's eyeballing the Death/Beast wizard staffs from the Empire) and a skull or dagger. The more notable thing is that all of his banners will be cloth, rather than the totems that come in the kits, and will probably take the form of purple rags draped over a cross (similar to Christian Methodist crucifixes). The whole army color scheme is purple and black/grey, with brass equipment.