I think it could work if the design takes some cues from (for example) Guillermo del Toro, particularly the amazing creature designs he often uses from Spectral Motion (which itself would be an appropriate name to be associated with the film, for obvious reasons).
In terms of casting, I think there are any number of actors who could more or less do it, but I think it's really important to be able to carry both the arrogance of pre-accident Strange and the mystery/wisdom of Sorceror Supreme Strange, as well as to find a way to remain the same guy during the transition. The animated Sorceror Supreme movie did a fairly good job of this, I thought, though the origin story itself was very different from the one I grew up with.
I like bionicbob's idea of Oded Fehr, as he can play many different notes and has the right look. I wonder whether he won't be considered American enough. Ever since I saw The Count of Monte Cristo, I thought that Jim Caviezel would be very good in the role, though a) I don't know whether his Person of Interest shooting schedule would conflict and b) I wonder whether the occult parts of the storyline would be too big a conflict with his well-publicized personal beliefs. I could also easily see Guy Pearce in the role, but since he's already (and recently) been seen in the Marvel films, I'm not sure they'd want to go that way. Patrick Dempsey has been linked to the role on and off for years, and while it seems at first like a bit of an odd choice possibly based on his role in Grey's Anatomy, he is a good actor who doesn't get to show his range often enough, so it could be interesting if they went that way. I'm not particularly interested in Cumberbatch in the role, primarily because he's tipped for everything these days -- and while he does have a great voice, there's much more to Stephen Strange than that.
If he hadn't died all too young a few years ago, Anthony Quinn's son Francesco Quinn might have been brilliant as either Strange or Mordo...
I think a good Baron Mordo is essential to making the film work. Had it been made in the early 90s, I would probably have suggested someone like Jeroen Krabbe; now, I think my ideal would be closer to Javier Bardem or Cliff Simon, or, if they cast based on voice and physical presence rather than classic look, someone like Christopher Judge.
My biggest concern with the film overall is that they not try to go too big or too well-known with this, kind of like they almost did when Tom Cruise was attached to Iron Man all those years ago. Get the right actor who can play both arrogant and humbled, know-it-all and know-nothing, and someone who can convincingly seem to find the faith to stand up to unimaginable horror armed only with some arcane words, a few hand gestures, and strength of will (and who can sell the idea to the audience, no small task even in the post-Harry Potter era). Who is that actor? I'm not sure, but I think the best option might be someone who isn't the obvious choice.