The City of God II: Demons and Morals

It seems my idea that Augustine here tries to develop a distinction between pagan and Christian virtues was really flawed. Rather, the concept of suicide seems to be the great exception in a discourse where Augustine essentially thinks of morality as basically universal (he constantly brings up pagan writers as witnesses for the same virtues that Christians strive for. If Augustine in book one argues that the Sack of Rome is not the consequence of the Romans abandoning their old Gods, in book II he argues that the lack of morality that he (and his antagonists?) feel are the true cause, was not caused by Christianity but had developed much earlier.

An interesting item is the way Augustine now turns up the "Pagan Gods are really demons" rhetoric. I wonder to what degree this is really A:s conviction and to what degree it is part of his attempt to make them look ridiculous. I am sure there are a dozen thesis's written on the topic. This is a fun quote, from II, 25.

Once upon a time, on a broad plain in Campania, where not long afterwards citizen armies came together in an awful combat, they [the demons/gods] were even seen to fight among themselves. At first, great crashing sounds were heard there. Then, shortly afterwards, many men reported that they had seen two armies fighting for several days. When this battle ceased, they also found marks there, as of men and horses, such as might have been imprinted by conflict. If, therfore, the divine beings truly fought among themselves, the civil wars of human beings now at any rate have an excuse. Consider, though, the malice or misery of such Gods! If, however, they only pretended to fight, is it not surely clear that they did this so that the Romans, in waging civil war as if by example of the gods, should seem to commit no wickedness?

Does Augustine really believe this?