I mean, that's how Orlando did Freddy and Jason fights, and those looked...alright?
I think Uni's hands are kinda tied with this one. On the one hand, "projection screens" make me think "blood elevator," and that's a problem. On the other hand, how else are they gonna do it? I can see one room with projection screen windows, and the next room having a GIANT La Llarona esque puppet coming through the ceiling, but...It's gonna have to be pretty small relative to the massive size it was in the show.
Come to think of it, would it be possible to do a projection effect ceiling? That would be kinda cool, seeing the underside of the mind flayer...