Yes, I don't see how a Mountain like Death Peak could have resulted from Lavos' eruption. One, it doesn't account for what happend to him, and two, it whould have made a "ring" of mountains, not a mountain going straight up.
Plus, if Lavos shot off back into space from that Area of death peak, it should be a crater, since Lavos getting enough force to leave the earth's gravity would enormous.