It shouldn't be a problem to acknowledge God's rulership over the universe, based on the homesteading principle. By virtue of having created the universe through His own abilities, He has ownership over it. And, just as if I had to obey the rules of someone who owns the property at which I currently reside (or leave his property), so I must obey the rules of the Owner of the universe.
"Hell" is separation from God. It is God giving the unbeliever exactly what he asks for--to have no further association with God. Of course, that means that the unbeliever cannot enjoy the benefits of "heaven", which is eternal relationship with God. The torment of "Hell" is self-inflicted, as the unbeliever spends eternity in bitter remorse over trading away the eternal gifts of God in exchange for the temporal pleasures of sin.
Good discussion. How would you address the counterarguments, lucidhawk, that bring up Jesus' mandate to "render to Caesar the things of Caesar's, and to God the things of God", as well as the whole "Romans chapter 13" argument?