[Gruenenfelder]

I'm thinking of doing a similar theme this year.
The Arkham Asylum idea is a good one. Depending on the size of your space you could incorporate other DC universe villains as well. (You could probably get some good ideas from the Dark Knight and Suicide Squad movies.)

For decorations you could use things like wanted posters for different villains (or heroes if you wanted to stick with the villains' perspective), artwork or posters of Batman, Superman, etc defaced by the Joker. (Joker was here, Y so serious?, etc written across them in red ink. The big red Joker smile drawn on artwork.)
You could also (depending on time and budget) make up props to look like dead superheroes. (Using skeletons or other Halloween figure props.)

I like these ideas a lot. My idea was to have a disturbed heroes thing. Not so much zombies or dead heroes, but rather heroes that have become villains. There's a Reverse Flash that already exists, for example. Do a way darker version of reverse heroes.