This would-be-event isnt really bad IMHO, if one disregards the heavy programming code vs effects in-game.
The only problem I see is that while Gyu is advocating for a nice piece of reward, the reward is seen as too high by tech admin Neji. So why not tweak the reward abit?
Two little suggestions:
1. Throw in some Gold to compensate for the reduction in gems reward (from 5 gems to random 1-5 gems) New players may not quickly appreciate gems, but they love gold.
2. Tweak the 10% exp reward, it looks like alot at high levels. (sorry Gyu ^_~)
As for orochi, isn't that Orochimaru the final boss? If it is, instead of it dying why not make it beat a hasty retreat at low hp, just like any classic first-encounter scenario.