Ok, so I thought we could put any discussion of morality here.
So, as you may have guessed, I'm Christian, specifically Catholic. Anyways, let's jump right into it. Because my faith forbids witchcraft, I believe in its real existence. Why would you forbid an impossible act? All the same, I think it was a rare thing in ancient times, and an extremely rare thing now, but nonetheless I believe it exists. Now, if I believe it exists in the real world, then what is the nature of witchcraft? Where does this power come from? Plainly, it does not come from man. Part of the definition of witchcraft is power beyond what is granted to man, i.e. supernatural power. Does it come from God? Obviously not, for He forbids it. Does it come from angels? Obviously not, for they do His bidding. Does it come from fallen angels? This is the only possibility. Angels are described as superior intellects, even superior beings, so obviously if a demon wanted to he could grant supernatural power. So, God forbids witchcraft because the source of that power is the worst sort (and of course that power is granted at a price, can you say Faust?). But is this the only reason witchcraft is wrong? I think not.
If we examine Satan's rebellion, what does it fundamentally come down to? Satan wanted to be God. Satan did not want to be the being he was created to be (possibly the highest of all angels). Instead, he wanted to be God. Witchcraft requires an almost identical disposition of the human mind. At the least, we want to be angelic rather than the mere men we were created to be. But usually, we want to be like God (to the human mind, demonic powers are probably so great that they pass, for a time, as divine powers). So, witchcraft is also wrong for the same reason that Satan's rebellion was wrong, namely that it comes from ingratitude, envy, and pride. At this point, there seems to be two reason's why witchcraft is wrong, but I think things can be simplified even more. Demons would not be encouraging men in ingratitude, envy, and pride if they themselves had not fallen. So ultimately, it all comes down to the original rebellion. Ultimately, witchcraft is wrong because in its essence it seeks disordered power in ingratitude, envy, and pride. God created angels to be angels, not to be anything else. Likewise God created men to be men. Even if he had wanted to create another god, it would be a logical impossibility, as there can be only one Omnipotence. God stratified creation, and I think most Catholics would agree this has a great deal to do with its (creation's) beauty. A man wishing he was an angel or an angel wishing he was God is really as silly as me wishing that I was you. I'm not you, I'm me. Envy is a kind of insanity, to desire to be something other than what you actually are. And of course it fundamentally comes from ingratitude. While God delights in you and me, the envious man doesn't see good in himself worthy of delighting in. And this is of course pride to think your opinion better than God's knowledge.
And finally I can find a place for the law-chaos axis (or in more precise language, the order-chaos axis). This was really annoying me for awhile. As a Catholic, I can easily see any man on a spectrum of good and evil. But it never seemed to me logical to have a second moral axis. There is only good and evil, there is no other moral axis. But in a game world this additional moral axis solves some problems in logic and makes the world more conducive to gaming.
Most philosophers agree that the reason a given action is wrong is because it harms the soul (in psychological terms, the action is "egodystonic"). So, right and wrong can be modified in our world by changing the definition of a soul and therefore what may or may not harm a soul. In the real world, I believe a human soul should not be thought of as separate from its body. They are one psychosomatic whole. An angel meanwhile is "pure intellect." And there can be only one God. In the real world, what I would call "special ascension," to the extent that it's possible, would necessarily be evil. I am defining "species" here as any class of being. So by "special" I didn't mean "shortbus" but "having to do with species." Even if envy were not an issue, special ascension is evil in this world because it ruins the order ordained by God. A human soul is fundamentally human. For it to try and become something else would be nothing less than mutilation. In other words, the "humanness" of a human soul is not merely some trivial quality, but a defining characteristic. For instance, to take a white chair and paint it blue is to change a trivial quality of the chair: in the end, it is still a chair. But if I take a chair and remove its legs, I've changed an essential quality. It's no longer a chair. Likewise, to the extent that special ascension is possible in the real world, it is evil because it's an attempt to change an essential quality of the human soul, namely its "humanness." While mutilating a chair is no real issue, something sacred like a soul is a different matter.
However, in our game world, we could say that any given soul is not essentially defined by its species. In other words, the soul of a human is not particularly different from the soul of an angel or the soul of one of the gods. They're just souls inhabiting different vessels or ascribed different qualities - that's all. And, if a PC wanted to undergo one of the rituals in Savage Species to change from say human to ogre, this would have no moral value. Indeed, it would do no harm to the soul of the human in question.
It should be noted that I think any form of arcane magic is a form of special ascension. The reason for this is that in virtually every mythos the race of man is considered the one ordinary, normal, or mundane race. Yes, there are human wizards, but they are by definition exceptions to the rule. They are wielding power that is not proper to man. They are wielding a power that is above and outside of man. This is apparent in the case of the wizard who studies magic as a "subject." This may be less apparent with a sorcerer. But even in D&D, a sorcerer is not truly human. Yes, his power is natural, but HE isn't entirely natural as far as his humanity goes. He has a bloodline from a dragon or something. In other words, he has some of the blood of a creature to whom that power is proper.
Divine magic meanwhile (or miracles big and small) because it descends orderly from God, is not special ascension. The thaumaturgist (or miracle-worker) is not someone attempting special ascension. Likewise, if a PC plays an angel, the magical powers he would have as an angel are qualitatively different from the magic of a wizard. By this I mean the angel's powers are proper to an angel, while the wizard's power is not proper to a wizard.
Anyways, I apologize that this is doubtless very disordered, but hopefully you'll see how I'm beginning to pull things together. The law-chaos axis then should be used to describe behavior that in our game world no longer has a good or evil quality. In that respect it is neutral. However, to the extent that any given act is an instance of special ascension, it is chaotic. There are not really any positive lawful acts, but a lawful character is defined by his largely abstaining from chaotic acts.
Anyways, there's actually a lot more I will post on this, but it's getting late and I just want to get this out.