Would this make a good storyline?

Ivy possesses Gail and begins viewing Nick as her Brian and takes a dislike toward the women in his life. Possessed Gail then goes all psycho and breaks into Carla's flat and attempts to stab her while she is in the shower.

Nope.

Well to people who've watched Corrie for a long time - it has been obvious that the writers have already turned Gail into Ivy (its taken place over the last 15 years or so) so that bit really wouldn't be anything new.

The psycho/Carla bit is being silly (although that isn't to say I dislike your idea of getting rid of whinge-bag Carla).

There was a point, around 10 years ago, when it looked like Gail was going to become like "poison" Ivy... But they seemed to abandon that and decided to turn her into a comedy figure/complete moron instead...

I'd say the last 18 years to be a bit more exact , when Nick first married Leanne I told my mum that it was obvious Gail was turning into Ivy.

Gail isn't Ivy, wasn't Ivy deeply religious? I doubt Gail even owns a bible