Yes, Lavos is statistically stronger in the Ocean Palace than ANYWHERE else. As for where I got that info from...me. I checked it myself.
Take a look using the program Crone (available at Zophar's Domain). Under the Ocean Palace category, you'll find this incarnation of Lavos, with a little monster # and all that stuff. Then scroll to the end of the game and check out Lavos there. His stats are *MUCH* lower (like 10,000 fewer HP, I think like half the attack power, etc) and it's a different monster number.
So it's not just because of your equipment. He really IS that much stronger. Technically speaking, it's a different "monster" that you fight at the OP than at all other times.