First of all, all of Master Greevil's pokemon are at level 50, and to make matters worse, they are all shadow pokemon. In my experience, I try to have at least one shadow pokemon in the high level 40's because his pokemon use only shadow-type attacks, and shadow attacks aren't very effective against a shadow type pokemon.
Also, Shadow Lugia and Master Greevil are two different battlers, so yes you will still have Lugia. But be forewarned, when you catch Shadow Lugia, Greevil isn't going to be all honky-dory about it. He will lay the smackdown on you and your pokemon!!
Conquering the world, one step at a time.