What bothers me is the duration: Several
days after application?
How about a few hours, or a single game day at a maximum. After all, war paint get's smudged during combat; or loses, I guess the word would be "intensity", as it collects dust and dirt (it's an oily substance after all).
In a Conan setting, where magic is rare, I'd call it Alchemical in its effect and creation. (Only problem being that all of the standard Alchemical materials listed in the book can only be made by a Spellcaster.
)
As an actual magic item created using straight 3.5 DMG/PH rules and spells, I'd look at the Rage spell as a resource for something like that. You wear that and you can Rage once per hour for the duration, with Rage duration based on the recipient's level.
Add in a Skill bonus to Intimidation (and possibly Disguise, for purposes of masking one's own identity), and you have something reasonable.
If you think it needs a limitation, say that its duration is shortened or terminated by any magical healing.
On a side note, I think that the intimidation rules in D&D need work. A Grizzly Bear (straight from the Monster Manual) should be terrifying, but by the rules he's just the opposite: With a charisma of 6 he's at a -2 on all Intimidate rolls, and gets nothing from Strength (27), his roar nor his claws (D8 + 8).
He gets a bonus for Size, per the PHB, but that's it. Meanwhile the slightly built Bard (i.e. third string at everything), with no size nor Strength bonus, and with no weapons or anything frightful about him/her, would be relatively terrifying. (It's a Charisma based skill, so if the Bard has a Charisma of 16 or higher, he beats the bear.)
Getting back on topic, one of Intimidate's optional uses is to Demoralize opponents. It's a standard action in combat and the opponent is Shaken (-2 on attacks, skill checks and a few others). But again, the rules don't include any adjustments for appearance.
If I were writing this rule I'd include appearance as a circumstance modifier, with the note that any advantage to intimidate would give a matching penalty for Diplomacy, and visa versa. That would help cover the War Paint's bonus to combat Intimidation effects.