Based on David Sutton's "Demoniacal" and Brian Lumley's sequel to it, "The Kiss of Bugg-Shash".
Worshippers: I figured that while Bugg-Shash is worshipped by zombie-like creatures that there just weren't enough zombies in Arkham Horror to make a valid threat, so Cultists now become tougher, and undead.
Power/Start of Battle: I figured that Bugg-Shash would become more desperate and dangerous the more of his pawns you killed, thus defeating Cultists aggravates the terror track, and Bugg-Shash's combat modifier is then derived from the terror track. I chose not to make Cultists endless, as 6 (or 7 with Dunwich Horror) Cultists is a -6 (or -7) modifier if all of the cultists come out during the course of the game, and the terror track will go up otherwise. The bit about tomes taking an extra success to use comes directly from "The Kiss of Bugg-Shash", whereby the characters have extreme difficulty finding information about Bugg-Shash, in-game making it a little more difficult to gather clues and spells to use against him.
Attack: This is from my interpretation of what Bugg-Shash does in the story: a drowning engulf. The investigators are fighting desperately to hold their breath, thus the Will check or they lose stamina.