I need some help formulating ideas for a cursed version of the Rod of Rulership. 

Here's the deal, my players stole a Rod of Rulership a VERY long time ago, and put it in a lead box because they were afraid of being tracked. They completely forgot about it, and never used it. Several months ago, they were on a quest to explore some lay lines where the weave of magic was being corrupted by a lich. With some help of an NPC, they took a sample of the corruption AND PUT IT IN THE LEAD BOX WITH THE ROD OF RULERSHIP!!! As a DM, I feel like they dropped a big juicy "your actions have consequences" moment into my lap. Sure enough, they just left it in the box for MONTHS. They finally sorted their inventory, and got REALLY excite about this item they've been sitting on for literally 2 (actual real world) years. *Small note, my players are item hoarders. There's about 5 or 6 unidentified items in their inventory that are RIFE for chaos* Anyway...

So the time has come, and I'm looking for fun and interesting ideas of how to make a Corrupted Rod of Rulership that is thematically appropriate. It spent months in a small box interacting with powerful corrupted source magic. Any advice on what I should do with it would be much appreciated.

whoever is attuned to the rod begins to act like some kind of despotic warlord and uses the rod to raise an army to destroy an enemy of that lich! its the dead-er hand!

I am new to D&D Beyond and created my first magic item.  I created a ring of itchiness that is a gold ban with arcane inscription (unreadable) on it.  When the player puts it on, they break out in an itchy rash all over their body. Once removed the rash goes away within 1d10 minutes. This is for a beginning level group.

What do you think?  Am I on the right path?

Here's something that might be fun:

The corruption has affected the rod in a way that would normally turn a person to pure evil, however, it has not been in contact long enough to affect the whole body. In this case, it has only enough power to corrupt just the arm of the person who attuned to it. So now just the players arm is evil and will act out on its own accordingly. Let's say it's lawful evil so it's not going to attack the player it's attached to or refuse to defend them from an attack (though that would be a really funny battle), but it could throw a random punch at an NPC, make rude gestures, or try to swipe something shiny within reach. Lots of options for DM fun ... and now I might have to make this item for my campaign. 

It depends on how nasty you want to be with it, really. For example...

Corrupted Rod of Rulership

You can use an action to present the rod and command obedience from each creature of your choice that you can see within 120 feet of you. Each target must succeed on a DC 15 Wisdom saving throw or be charmed by you for 8 hours. While charmed in this way, the creature regards you as its trusted leader. Each creature charmed by the rod has its hit point maximum reduced by 10; you gain 2 temporary hit points per charmed creature when this happens. This effect does not count as damage for the purposes of breaking the charm effect. If harmed by you or your companions, or commanded to do something contrary to its nature, a target ceases to be charmed in this way. If a creature is reduced to 0 hit points by the rod, it rises as a zombie under your control for the next 8 hours. Once used, the rod can't be used again until the next dawn.

Curse. This rod is cursed, and becoming attuned to it extends the curse to you. As long as you remain cursed, you are unwilling to part with the rod, keeping it within reach at all times. If no creature is successfully charmed by the rod within a 24 hour period, your maximum hit points are permanently reduced by 10. Removing the curse and de-attuning from the rod do not restore these lost hit points; they can only be restored at the DM's discretion.

While cursed, you are unable to perform mundane actions. Instead, you must order other people to do them.

My turn to do the cooking? No, it's not. Barbarian, you do it. 
My turn to chop firewood? No. Fighter, I'm ordering you to do it.
Bard, make me a cup of tea.

Every obeyed action is twisted to be as violent and bizaare as possible. Asking a charmed creature to save someone from drowning causes them to strangle or impale them, since they cannot drown if they are already dead. Asking them to get through a door compels them to violently claw away until it is nothing but wood chips. Any creature who dies while charmed rises as an undead

There are a lot of ways to do cursed items. As pointed out, you could permanently take 10 hit points every 24 hours away from the character totally ruining said character until you make up some godly way of restoring. I’m being a little facetious here. That’s probably not the way you wanna go about it.

Items in my opinion should start small almost not noticeable, but you pass indiscriminate notes to the player. Every once in a while you roll a 20 disadvantage for something they’re doing that they don’t know about. As the curse grows, it can be more overt. They start having personality changes that are subtle as noted above instead of doing their chores they want someone else to do it for them. They don’t want to give up the rod, even if their other items are better you pass them a note saying no your character wants to use his rod.

You can then build this in to your overall plot of the game on how the character gets rid of it and be recognizes that it’s cursed how the party recognizes its cursed and then they all do about it. Does the sides of the fighting is the one who cursed it or controls the curse? Does the party recognize it? Try and remove the item and there’s an I party fight?

You are right the party gave you a perfect curse item to add to the campaign and it will be beautiful once they look back and realize what they did to themselves.

Quote from Zoradain >>

There are a lot of ways to do cursed items. As pointed out, you could permanently take 10 hit points every 24 hours away from the character totally ruining said character until you make up some godly way of restoring. I’m being a little facetious here. That’s probably not the way you wanna go about it.

What? The max HP loss is easy to avoid -- just make sure you charm someone every day. Even if it's another party member...

Every time that the rod is used, force the attuned creature to make a DC 1 charisma check or become cursed (the DC increases by 1 every time that it is succeeded). The cursed creature automatically fails any saving throws against being charmed, and will follow orders from any creature with a greater charisma score than it. 

A cursed Rod of Rulership could have the following additional feature:

When the effect ends, the creature knows it was charmed by you becomes hostile toward you. A creature prone to violence might attack you. Another creature might seek retribution in other ways (at the DM’s discretion), depending on the nature of your interaction with it.

For more drastic chaos, it could instead cause the rod user to also be possibly affected by a Antipathy/Sympathy and Bane spell while the target is charmed. 

Upon successfully using the rod, the creature must make a DC 15 Charisma saving throw. On a fail, whenever that creature makes an attack roll or a saving throw, it must roll a d4 and subtract the number rolled from the attack roll or saving throw. The enchantment also causes the creature to feel an intense urge to approach the target while within 60 feet of it or able to see it. When such a creature can see the target or comes within 60 feet of it, the creature must use its movement on each of its turns to enter the area or move within reach of the target. When the creature has done so, it can't willingly move away from the target.