He showed several illusions of himself to Karnak, and then went invisible. Examining the world he saw the vulnerability of the Eastern Kingdom, and the proximity to those blasted Chaotics. The lawfulness of the kingdom appealed to him, and he saw that it would not take much to give it a push into Evil. Orcs were also near the chaotics, and he had had so much cooperation from them before.
But first he had to clean up the garbage hanging around. That ignorant hyena godling was sitting there laughing at some other stupid beast's difficulties with a mortal. So he and all of his little smelly followers were kicked back into the sludge where they belonged. The little ones fled in as much terror and confusion as their lord had. Then Larz-Dun went ethereal.
Seeing Roystille as the best place to start his infiltration of the kingdom, he set about making it safe from escape and unauthorized exits. Any who enter or leave the city must sign in and out. He also created the Ether Sphere. The walls of Roystille were meshed into the ether using a magically hardened bluish-gray alloy. Every building in the city is a closed area in the ether. Astrally, the whole thing is inside an asteroid.
After that he set loose the Ravers. Then he placed the Crystal deep under the mountains, right next to the chaotics so they could smell their Doom. Then with all of his plan in action, he performed the Ritual of Disembodiment, and became simply thought and being. He will continue to be aware of what's happening through his Servants, but he is busy underground and elsewhere on the plane and possibly on other planets. But his material power rests at the heart of these mountains. There are only two ways he will appear: 1. If the Sword is held and the Incantation started. 2. If a Raver invokes his appearance.
The ones at Gray Eagle believe that he may not be personally up in the mountains. But his servants definitely are. Actually, even though he is a part of the plane, he is insubstantial and probably not aware of details of situations except through his servant's eyes.