I'm not so sure about taking Balance as the central rune for a skill tree. It's too central, and already being used too much by the existing spells (already 7 existing spells use it). I'd personally go with Physicality/Spirituality, or perhaps leave it open. It feels weird to have a tree called "Physicality Magic" or "Spirituality Magic".
So priests could have:
Life Magic - Healing spells oriented around the Life rune:

Death Magic - Offensive spells oriented around the Death rune:

Support Magic - Other spells that would rely on the Physicality, Spirituality or Balance rune, or no rune in particular.
Spellcraft - So they can enhance their spell speed just like mages can, and are able to cast the most basic of spells as well.
Staff Defense - Like mages, it should be possible to orient on their defense.
?Maces? - While the elemental skill trees have several offensive spells each, priests need to focus on Death Magic for their offensive power. Giving them access to a weapon skill provides an alternative to those that don't want to rely on offensive magic on their healer.
It's important to keep in mind that priests should not become a requirement to each party. LoG currently allows combinations like 4 mages or 4 rogues (4 fighters is not as viable, since they have no back row skills). So Life and Support magic should be interesting and helpful, but not mandatory.
Also, LoG's spells are mostly fire and forget. You enter the spell, and can't target it after. So we can't really have spells that affect a single member.
For Life magic, there are a few things I could think of:

- Heal - Replenish everyone's health to a certain degree.

- Cure - Remove the Poison and Disease debuffs from the party.

- Exorcism - Cast a bolt of light. Deals quite a bit of damage, but affects undead only.

- Vigor - Boost the health regeneration rate of the party for a minute or two.

- Create Food - Raise the food bar of the entire party.
I thought of a skill that could resurrect a party member, but that might be hard to balance.
For Death magic, I could think of:

- Curse - Would lower the attack power of the creature(s) on the square right in front of the party for around 30 seconds.

- Slow - Would lower the movement speed of the creature(s) on the square right in front of the party for around one minute.

- Death Ray. A direct damage spell. It does not bring the power of Fireball/Lightning Bolt or the utility of Frostbolt/Poison Bolt, else mages would be pretty useless.

- Fear - Would force the creature(s) on the square right in front of the party to stop attacking and try to flee for about 30 seconds.

- Death Shield - Would temporary make the party immune to Curse/Slow/Fear cast by monsters.
For Support magic, I could think of:

- Shield of Faith - Raises the Protection score of the entire party for a few minutes.

- Bless Arrow - Enhance arrows and bolts to deal extra damage, so players have an alternative to bringing a mage for this. This would of course require the addition of these items.