Yep, precisely. With the One Ring out of play (starting in 3419 2nd Age) all the various Rings of Power could be put into play without immediately exposing the wearer. Somewhere around 3434 and 3441 Sauron gathers up the Nine (Human) and the Seven (Dwarven) rings (he's not able to retrieve the Elven ones though). That means, for the purpose of the campaign, I've got until somewhere between 3429 and 3441 to fairly freely mess around with the details.
So the Elven rings would be with the Elves obviously. The Nine and the Seven would both potentially be with those they were given to originally, but what happens from there can be altered. After he gathers those rings back up from wherever I decide they go (somewhere between 3429 and 3441 - before he is defeated in the wars at the end of the 2nd age), he 'corrupts' them and re-distributes them (much later) I believe. So the Nazgul don't even exist yet at that point. Now, I will have something akin to the Nazgul. Human individuals who had already been corrupted. I'll call them "Dark Riders". They will give the same feel, but not be as powerful as the Nazgul (you did NOT want to mess with them in MERP) and not quite undead.
There are some bits and pieces of Middle Earth that have been talked about that work well within some of my mythos... for example, my idea that Liches are really Elves who have made themselves fully immune to age. They are not always evil, but tend towards it more due to the very nature of what they are doing. This relates to some of the backstory about the rings of power created by the elves. Vampires are the human version of this, the idea being that powerful elven undead are more able to retain their new state, while human ones need to 'feed' in order to retain their new state. This explains the Tolkien part of it that relates...
"Tolkien’s essay concerning Elvish spirits seems to explain the reason for why the Elves made the Rings in the first place. They were trying to forestall the inevitable fading to which they were doomed (if they remained in Middle-earth). By delaying the effects of Time the Elves slowed their natural aging to about 1/10th of the normal rate. Hence, a thousand years for an Elf under the influence of the Great Rings was really more like 100 years — and Elves hardly aged at all in the course of 100 years, so they would not have to worry about fading for a long time.
But some Elves may already have faded by the time the Gwaith-i-Mirdain made the Rings. Or, it may be that they desired to converse with the spirits of Elves who had died in Middle-earth and who had rejected the summons of Mandos. When Melkor (Morgoth) was still self-incarnated during the First Age, according to Tolkien, he could force any elvish spirit to reside with him in Angband if the dead Elf refused Mandos’ summons. But what became of those trapped spirits after Melkor was defeated?
And in the Second Age, what happened to the Elvish spirits who refused the summons? Tolkien implies they would have become “haunts” (ghosts), perilous for Men to interact with, but desiring (eventually) to return to their own bodies or to seize the bodies of others. Hence, necromancy would have become a dangerous form of sorcery for Men but might actually have been one of the goals of the Ring-makers."
To be blunt, doing this allows me to take a very familiar, pre-designed (ready to go) setting and story that the players love, but not have to worry about following a set storyline.