So this is a bit of a large suggestion.
Firstly, renaming the highest skill levels away from "Legendary". Nothing comes to mind at the moment.
Secondly, strange moods are disabled for normal dorfs. Possessions are ok though.
When dwarves reach a particularly high skill in a 'legendaryable' skill (not all skills should allow legendary status), there is the possibility of them getting inspired with a strange mood. These strange moods should be one of those complicated ones which needs 10 items or whatever. Provided that the dorf doesn't go crazy, he'll be bestowed the title of legendary dwarf, and have a legendary skill in whatever it is he mooded.
Once a dorf is a legend, there are some other changes. For one, he is treated as a noble, and will have noble demands. Originally they will start off small, but as he increases in skill he will want more luxurious property. He will also make mandates which he expects to do himself (so a legendary armoursmith will mandate armour he's interested in to be made).
If his mood drops, instead of throwing a tantrum or getting people arrested, he'll just leave. He'll move off the map taking his family with him and just.. disappears. Obviously you can integrate it with history and he wanders around, settles in other cities et cetera - becomes an important historical figure.
On the upside, if your fortress produces many items of a particular type, you can get a legendary dorf come in similar to how nobles come.
I think this'll add an additional dynamic to the game. Right now people barely tolerate nobles, but you'll have to suck up to these Very Important Dorfs if you want to keep their services.