Has anyone played something similar? Is there any way of making it more competitive without dropping the bastiladons (which I honestly feel are fairly comp anyway)?
I did, and despite I am not assured, that TL can go as far as DT/FoS lists, if you are going for a challange, skill and luck can lead you to the top places. You may check my thread on my TQTH list. We had a local tournament and I went 4-1, but going 5-0 was entirely possible. My meta is not the most competitive, but I still consider it a decent result. I went third and another TQTH list went second. Unlike my lists with 40 skinks, it went even lower on bodies with 5x guard, 10x skinks and 10 saurus as troops - other stuff were monsters.
After having a couple of dozens games with TQTH, I can assure you, that there are some myths surrounding it in the community, which seem fair on paper but, in fact, on the table things are different.
1) TQTH is low on bodies, so you will have problems with scoring;
Actually, I had none. Yes, I was brining 40 skinks, but in several games they died turn 1, protecting my other stuff, and I still ended up winning. Yes, you may struggle sometimes, but it doesn't mean that it is that bad. The fact is you're going to wipe out most your opponent's forces, if you are going for Thunderquake and that's pretty possible. Once again, I'm not telling that you have easy time with low bodies, I just want to say, that you still can win.
2) Engine of the Gods is random, thus, Skink Chief is better;
In fact, both options is decent. I didn't try chief yet, but I like it on paper. As for EotG, you are not taking it for random abilities, no. You are taking it because it is a 14-wound behemoth with 4+ save, which can go to 3+ against small units/hereos/monters and can take powerful artifacts like Cloak of Feathers and Sacred Stegadon Helm. I like it with CoF very much, because with 12 movement, fly and ability to run and charge and command to itself, I can strike whereever I want and strike hard. The fact that you can heal/deal more wounds/ summon saurus is a pleasant addition. I never rely on these abilties but often find them very helpful. Chief has less utility and more damage and additional -10 pts cost can be handy. I'd still go with CoF for any choice, and SSH can be a trap, because you trade mobility for additinal damage. while survivablity is the same more or less, but -1 to-hit feels to be more universal than just +1 save. Also, great bow is more consistant at sniping. But you lose chance to summon saurus (which somewhat helps with low bodies) and get two wounds less, which saved me in certain games.
Once again, there's no easy choice here, so go with whichever you feel suits you better. I consider EotG worth the risk, because the main point for me is it's profile, not the cosmic engine.
3) Stegadons are much better than bastiladons, because they have more potential damage;
Yes, on paper stegadons are doing more damage, but I don't think that stegadon to bastiladon comparison is correct here at all. I don't even think that they compete for the same slot. Same as with Chief/EotG - you take one which you consider more suitable for the situation. Bastiladons are more CP-hungry and need this CP to compare in damage with stegadons, but, unlike stegadons, main chunk of their damage is shooting. This means, they are putting more pressure on your opponent (especially, if it is a daemon army). You will have way easier time sniping opponent's heroes. You have more freedom at directing this damage, while stegadons need to get into melee, which may not happen until turn 2 and when it happens, it can be diverting chaff instead of valuable target. Bastiladons will shoot at something turn 1. It is 100%, no exceptions. Something, at least something will be in range. Finally, bastiladons are super-survivable against direct attacks. This means, that it will stay for longer. You cannot just go and tie 20 ardboys with a stegadon and expect shut them down for the most of the game. Bastiladon's invincibility also forces your opponent to direct mortal wounds at them, not, say, at you weaker heroes. Also, they will stay for longer and deal more damage throughout the game. So, if you want more killing power, stegadons are the way to go, but bastiladons can provide more control over the battlefield, but they will eat all your CP and ask for more.
4) Thunderquake Templehost battalion is unecessary, because you already have 29" threat range;
29" may seem like a lot, but I could outrange mortek crawlers and Auralan Sentinels. The sheer possibility of additonal d6 movement that can be turned to 6 with a CP applies additional pressure to your opponent, especially when you have usually 24" of no man's land between territories. And sometimes you just don't want to place bastiladons in very front, to protect them from mortal wounds. Yes, your opponent still can place a hero ouside of threat range, but they will have way less freedom at placing it. Other important notes: a) battalion gives you additional CP, so you can use emergency Insane Bravery for example. If it is saved, it is and additional double tap on a bastiladon; b) it provides you an additional artifact. Fusil is very mediocre, but Cloak of Feathers is essential for keeping Chief/Engine alive. You really want to have it; c) less drops may help you against some tier-B armies, making your life a bit easier.
Concerning your list, I think, it could benifit greatly from priest, but double shooting > +1 to-hit, so, maybe, you can live without it. I prefere not to take kroak+astrolith+balewind combo in TQTH, because the only cast you really need it for is Deliverence, but without teleportation it is a bit too much of investment. However, other players had success with it, so it looks viable.
I like everything else. I don't think, that downgrading Starseer to Starpriest just for Burning Head is worth it. I took BH in my list. It is okaysh but not excpetional and also limits your set-up a bit, because you have to always have to keep in mind that you need to cast it. But starpriest can give poison to Kroxigors, increasing their damage even further. +1 to saves for them or Chief is a good option too. You can poison laser beams of basties (lol) and get that additional random MWs to snipe heroes.
Trust me, TQTL may be not as powerful as Starborne and has lots of weaknesses and bad matchups, but it is still strong and, most importantly, very fun to play.