Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
When written "Congress" meant the federal legislature. The Courts ruled that the 14th Amendment expands these restrictions to State governments (incorrectly I'm afraid).
The Ten Commandments has historical significance in the development of law in Western civilization. Thus there is a reasonable purely secular case that could be made for displaying them on government properties where law's are being legislated or adjudicated. I am not aware of any similar case that could be made for the demon statue. Its purpose as far as I can tell is to simply insult religion.
If the First Amendment is to be taken very broadly, then I think the case for banning the Demon statue from government property is far better than that of banning the Ten Commandments.
But I would not take it that broadly. Rather I think freedom of Religion is like freedom of Speech, those in government are not forbidden from speaking or from practicing or expressing religion. Rather, they are forbidden from making laws that force others to say one thing and/or not say another, or to compel people to worship or not worship, either God or even some stupid demon statue. Indeed, they are allowed to encourage people to pray for the Nation, as has been demonstrated by Congress doing so right around the same time the First Amendment was written. There is no "separation of Church in State" any more that there is a "separation of Speech and State".
“The Ten Commandments has historical significance in the development of law in Western civilization. Thus there is a reasonable purely secular case that could be made for displaying them on government properties where law’s are being legislated or adjudicated.”
I’m all for free speech, and religious rights. But as you said, the Ten Commandments are a main part of our history. Muslim beliefs and Satan worship are not. If they want to built a huge statue of Mohammed or Satan on their own property - good for them. Or if they want to have a parade down Main Street.