To make a decision for how to write your story, I would definitely begin with the needs of the plot.
Does the plot require you to describe action in more than one place at a time? Does it require the reader to become aware of the subtext behind the actual quoted statements of the characters? If so, first person story-telling becomes problematic; consider third-person.
Watership Down is told in a third person style that does not require a high level of omniscience. The rabbits in the book do not require much more than some basic biological behaviors; the rabbits do not have sarcasm or irony or hidden motives or ulterior designs. What a rabbit says (in Adams’ book), that rabbit means. When Fiver says he is frightened but he doesn’t know why, Adams asks the reader to take this at face value. When Hazel is confused and isn’t sure what to instruct his followers to do next, Adams tells us so. Limited omniscience works because the rabbits do not pretend or lie or be other than what they are. (Perhaps this is why the stories of El-ahrairah are so enchanting to the rabbits.)
It is a similar technique – but for opposite reasons – used in writing a whodunit or mystery. The author wants to keep the reader guessing, so he plays his cards close to the vest. He keeps his characters’ motivations secret to the degree necessary to conceal the true criminal until the last possible minute. The author limits his own omniscience so the reader is left with only specific physical clues (and cues). This way he can control the flow of information to the reader.
Also consider Carl Hiaasen, who writes more of a satirical thriller. In Hiaasen’s stories, we know who the villain is and what he is doing at all times, how the villain thinks, and what the villain wants. When the villain’s plans begin to go bad, we see the villain’s reaction. By contrast, however, we often don’t know what the villain or the hero is going to do next. This way, the plot unfolds as a surprise, and we get to sit in gleefully on the villain’s shoulder as his entire plot disintegrates around him. Hiaasen’s books are a guilty pleasure because we get to watch how the actions of the hero cause the villain to suffer ironic and poetic justice, while we cackle with mirth at his suffering.
But in The Lord of the Rings we almost never see into Sauron’s heart. We don’t know what Sauron is up to, except through interpretations of other characters. Gandalf is convinced Sauron will do one thing; Denethor is convinced of something else; Saruman has his own beliefs of what Sauron will likely do. Similarly, in The Belgariad we never know what Torak or his minions are up to; and in Asimov’s I, Robot we are not told why the various robots malfunction or what they are “thinking,” only the behaviors they exhibit externally.
So the question becomes one of plot, as I said. What information must you tell your reader in order to tell the story in the most satisfactory way? If you must communicate multiple simultaneous remote events, first person will be difficult. If you must communicate subtext, hidden agendas, emotions – not necessarily all of them, but some of them – then third person omniscient (or mostly omniscient) will probably work best.
Also, I don’t advise that you make up a brand new kind of mixed-first-and-third-change-on-the-fly perspective until you have mastered the straightforward perspectives. It’s not easy to do, and as the first-person or third-person-omniscient ground has been trod before, there’s plenty of good examples to follow.
FISH