The identity of the Hangman is the central mystery of Dark Victory, the sequel to Jeph Loeb and Tim Sale's earlier work The Long Halloween, so beware spoilers aplenty for both books.
The Hangman is a serial killer, targeting Gotham City cops, both clean and dirty. At each crime scene the victim is hung, with a game of Hangman (with some of the letters still missing) left behind. All signs point to Harvey Dent, but something doesn't quite add up.
While the serial killings go on, a gang war rages between the Falcones and the Maronis after Two-Face killed Carmine Falcone and Carmine's son Alberto confessed to the Holiday murders. The only major Falcone left is Sofia Falcone Gigante, daughter of Carmine, who was left paralyzed by the climactic battle in The Long Halloween.
In the end, it is revealed that Sofia was faking her paralysis to avoid suspicion, and that she was responsible for the murders. Out to avenge her father's murder, she first went after all the cops who helped make Harvey Dent's career. Batman is able to save Two-Face, her ultimate target, but Two-Face turns on Sofia and kills her.
Pros: Commenter A put it best:
Fits in the universe, easy to implement, Hanging theme is very dark. villain is very psychological. Could be entirely suspense / from the shadows, allowing the tension to become thicker and thicker to the point of exploding, especially since it's full of plot twists...
Cons: More from A:
Hanging theme might be hard to implement, especially if the crimes are pinned on the Bat. A villain who does not directly appear for the bulk of the movie runs the risk of being uninteresting. After The Joker, a straight serial killer might not cut the mustard.
I'd also add that the identity of the villain will leak, whoever it may end up being, and those that haven't read Dark Victory will be told that Sofia's faked her paralysis to commit the murders in the comics, so to preserve the mystery of the Hangman, they would have to change it around quite a bit.
How I'd do it: Parts of the setup don't work in the "Nolanverse." Two-Face is dead. Carmine Falcone, last we heard, was in Arkham. Sal Maroni was the mobster Two-Face took out. I think the best way to go about it would be to have Falcone's children targetted by someone looking to take hold of the Falcone crime family. They survive, barely, but know that if their father wasn't in Arkham, no one would have tried anything like that. They visit their father and he's still crazed, mumbling about the Scarecrow.
The initial attack gives you an excuse for the fake paralysis (either to follow the Dark Victory formula, or as a red herring), and have the Hangman target the Scarecrow, and the doctors, lawyers, and judges who helped his career.
Casting Guesses: Could be anyone, really, the Falcone family isn't as iconic as the regular villains. Sofia does look a bit like Drea Di Matteo, though, but with darker hair.
Verdict: I think there are just too many cons. And honestly, I didn't like Dark Victory all that much. But it's possible, I guess. I just hope not.