I like the idea of having another level, and I also like some of the aspects of this, such as having to beat 5 FGs in a row to face one. However, I would either make them slightly easier, tell you what DG you'd get after beating 5 FGs instead of only being able to face one after beating 5 FGs consecutively, or both.
I also think they should be made to be a completely different style to FGs, to allow room for new decks facing them.