I agree. If we're going to do a no lynch, then letting the vig kill defeats the entire purpose. Either way somebody dies, with the only difference being that this option essentially just transfers the kill from a lynch to a vig, thereby removing any choice or direction from it. Not killing anyone and preventing the use of both the lynch and vig would be even worse, as it would allow the Mafia a free kill, one which it would presumably use on someone that would give us the least information possible (in this case, Sadia).
Therefore, I don't see no lynch as a viable option. Killing anyone will give us some desperately needed information, and even in the unlikely event that all three kills (lynch, vig, and Mafia) hit town, then we'll only be at LYLO and still have an opportunity to win, one which we'll have an abundance of information and a much narrower range of people to make at that point.
That leaves the question of whether we should allow the vig to kill with us or not. There's no guarantee they'll follow our prescriptions in any case, but I'm leaning toward yes. Whether we kill Johnny or Pendio today (and I'm assuming it'll be one of those two, unless anyone has better suggestions), it'll probably make the real Mafia much more obvious, so I'm more comfortable with the vig choosing in that case. Not to mention the fact that it won't make any difference as to when LYLO occurs (at least assuming both town and Mafia kill regularly), so having the vig not kill someone will probably only have the effect of making us choose from one more person when the time comes.
As for who to lynch, I'm leaning toward Johnny. I think there's still some room for discussion, though, and I'm hesitant to start a lynch just yet. We should utilize the rest of the day to decide, and ask for an extension if we need it.