When Revenge Burns Green

Killed the boss at the first try, not sure if it's nerfed but I did it with a 390 ilvl Orc Destruction Warlock with starter build, whole fight took around 4 minutes.

TL;DR Key is to Subjugate the summoned demons!

(I rewatched my own fight, now here is a small update, uploaded the video too, link below.)
Fight starts after you find Madam Shadow and after a small talk (SPOILER) she turns into a Dreadlord named Lord Banehollow!
That's the boss you will face!

But, now, BEFORE THAT prepare yourself! Conjure your Healthstone, summon your Void tank, pop any buff thingies you will use BEFORE approaching Madam Shadow. One extra note, in my fight I totally forgot and didn't put down a Demonic Gateway but it can help to reduce your aggro, so keep that in mind too, during preparation.
Also, prepare your mind too, because it is surely a (long) SOLO fight, no one can assist you and the place gets phased, no other player can enter.

After the reveal of the true face, fight starts quite normally.
- At 90% hp boss will pop his first fel bubble, this breaks with certain damage, but he will also summon an Empowered Felguard with a sword and board equipped, that will probably be tanked by your Voidwalker instantly, BUT here is the moment:
SUBJUGATE HIM!
The Empowered Felguard will easily tank Lord Banehollow, do your rotation, melt him down.
- But you won't, because you will just melt his fel bubble down, and when you manage to do that he will summon the second demon, an Empowered Pit Lord.
Now, in my fight I subjugated Pit Lord and Felguard attacked me, so I just waited for Havoc to proc on him and kept attacking boss, used a Mortal Coil for heal and Fear him away, then easily killed him. Probably you should keep Felguard as tank and kill Pit Lord though, seems more reasonable, but even if you don't you'll manage, no worries.
- Now you'll have two Empowered Dreadstalkers, just kill them, they're low hp, no need to worry. They'll keep coming until you get boss down to 60%.
- At 60% you'll have your second Empowered Pit Lord, yours will probably die off at this point so subjugate this new one and turn back to your rotation.
- Now you'll see an Empowered Imp, fun thing is, if you don't kill (or subjugate) this one, he will do a Fire Storm and rain an AoE with that all around, you'll see small fall points, escape from them.
- Boss will also start to cast Rain of Fire too, you'll see big circles on the ground, also escape from these.
- Again, prio is Empowered Imp, kill it then turn to boss, do some Drain Life, watch out for your own hp.
- Your Empowered Pit Lord won't keep any aggro, but that way it will do nice damage, he will die at some point but no worries, just keep doing your damage rotation and healing yourself.
- At 30% boss will pop another fel bubble and start another Drain Souls, just dps his bubble down now, but oh no... You won't because this bubble is huge, fills up boss's hp up to 50%~ish levels, but no worries help is coming!
- When boss finishes his channel, this time an Empowered Felhunter will come. Immediately Subjugate it! (I don't know what will happen if you don't but since they are "Caster Killers" and you are a caster, probably nothing good!)
- But here is the good part, this new colorful fluffy puppy IS the help! Send your new pet to boss, and here is the good trick: It will dispel boss's fel bubble instantly so you can continue to melt him down!
- Watch out for Seeds of Corruption now, with the purple circles and orbs at the center, also watch out for the Rain of Fire's big red circle, won't be too much of a problem but don't tunnel vision because boss is low.
- You can Fear or Mortal Coil boss now, pop one to heal yourself if you get low, also don't forget to Life Drain too, watch out your hp!
- Throw some more damage and he's dead! (Promising he'll be back... Arnie? Naa...)

So, that's it!

As you see, I can't say it's "easy" but it's very doable.
Focus on Subjugate, that was the key reflex move for me.

Good luck fellow Warlocks!

*Uploaded my fight video to give an idea about it, it's here:
https://youtu.be/a4jXmf6LrQ4

For those wondering "what's next?" after completing this quest: Yes, there is a followup. It will take you to meet Oman in Booty Bay. At this time, nobody seems to be getting this next quest, and I suspect that the followup is timegated until tuesday reset. Regardless, there is more to the questline.

EDIT: This was confirmed today, July 18th. Initiate Oman will send you a mail containing the item "A Shady Letter" which begins the next step of the quest. Whether it takes 7 days from the day you complete the first quest chain, or if the letter simply comes on the day of the next tuesday reset, I cannot say (I completed the quest chain on patch day). It's a one-step quest to speak with Oman called "A Lighter Shade of Fel" and rewards you with a glyph.

For those wondering "can I beat this?" I echo the other comments from successful runs of it; you can pull it off, even at lower ilvls than current raid gear, if you keep a cool head and use your abilities. That means:

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• Subjugate, subjugate, subjugate! Lord Banehollow's adds are annoying and messy if you don't stop them. I strongly recommend the Pit Lord for subjugating (I seem to remember that the Pit Lord dies over time and he'll summon another, just grab them as they come). Banishing or simply focusing down his Felguard is a good option and leaves only a few weaker adds to mop up. Remember, Banish lasts 30sec!
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• His lesser felhounds are annoying but are fragile can be one-shot with a Conflagrate or similar instant cast spell. His imps are similarly weak.
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• Prepare! Conjure healthstones and use 'em. I'm a mediocre 395ilvl with no tier and a mess of unenchanted gear, and I needed that burst of healing to get out of a tough spot.
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• Spec yourself in a way that emphasizes self-healing and defense. This is not a sprint, this is a marathon of a fight. Dark Pact at high health can put a big shield buffer on your precious HP, Grim Feast will get you Drain Life healing that much quicker, Soul Leech with Fel Synergy is good ambient healing/shields while you're focused on damaging things.
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• Others mentioned using Aff or Destro instead of Demo to avoid a big DPS loss from subjugating the Pit Lords, and I agree; I did it with a Grimoire of Sacrifice Destro build. Avoid demon-centric talents which don't work on subjugated demons; Soul Link without GrimSac for example, or Fel Domination. I didn't use it when I did the fight, but Banehollow casts a lot so Curse of Tongues might be useful to have.
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• Some report that Oman shows up around the last part of the fight; he did show up for me, but he seemed kind of useless. He might be able to hold aggro on Banehollow and prevent the encounter from failing in the event that you die and self-rez (you did soulstone yourself, right?) but I wouldn't count on it.
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• Banehollow's shield is beefy. After dealing with his adds, you have to burst as best you can to damage or outright break his shield. I specced Destro with high emphasis on single-target; I probably could have spared a few points in an AOE talent to mop up the felhounds, but it worked out for me anyway.
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• "Wasn't this easier on the PTR?" Yes, yes it was. I suspect the devs wanted people to not get hung up on this step and do the rest of the questline on the PTR for testing purposes, but wanted this to be a sort of mini Green Fire-boss-type encounter when it hit live.
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• CC! I can't believe I forgot CC. There's no adds to accidentally aggro with a rogue fear, so fear mobs if you need to. Mortal Coil can be a great interrupt and doubles as healing.
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• Stay mobile; this fight has "move away from the ground effect before it goes off" type AOEs flying about which, while not one-shots on their own, can put you in one-shot range from everything else going on if you stand in too many. In this case, self-healing is your friend.
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Taken together, these pointers and some other bits I'm sure I missed but others put in their comments will net you the kill and get you past this point in the quest. Good luck, fellow Locks!

I'm sorry but most of us warlock can't make a dent of that demon. What am I doing wrong here?