I think its the Dreamstone actually.
Consider electricity would burn you alive in its pure form. But convert and control it, and its extremely harnessable.
Sure the Dreamstone unproccessed would drain you. But harness it, change it, and turn it into some dynamically usable. Till it begins to change you. The Masamune harnessed the emotional energy of the user. But it also began to affect others. While this is only most visible in its evil form, there's no evidence it wasn't true in its Holy sword form.
So could it not be the thing, that through our manipulation, probably some rudimentary form of science, it began to change us too?
I like the Frozen Flame idea and all. And I do believe that had a hand. But I don't think it was the only hand. Is the famous quote at the top of my signature not atrributed to the Dreamstone?
Have you played Chrono Cross? Common sence proves that the shard of red rock WAS and IS the Frozen Flame.
1) Chronopolis says that a drastic change in the humans anatomy and brain size happened 3 million years ago, because they came in contact with something alienish.
2) Chronopolis says that because Lavos killed off the Reptites for the humans, they survived. That they are his prodigy in more than one way *hint hint- Frozen Flame evolution*
3)If the Prehistoric people had dreamstone all along, then they'd have been advanced before 3,000,000BC.
4) The Masamune was powered and formed from Lavos' energy, and is guarded by Masa and Mune. A lot of it's energy is released when the user releases emotions, but the evil one automatically feeds off their negative ones.
5) Lynx called the Frozen Flame "The Crimson Stone". That's almost what Belthasar said. Per say, Belthasar didn't know what to call the Frozen Flame until he came into the saved timeline in 2300AD where the Frozen Flame was more than a myth and was given a name.
6)The word here being "shard" that relates to what Chronopolis had said about a "shard" of Lavos falling off as he entered the atmosphere.
Ofcourse, Ultima magazine says that the Frozen Flame is dreamstone, but Ultima cannot be trusted. How can a piece of Lavos that is sentient be a natural inanimate object that is only produced on the planet. Not to mention the magazine having descripancies to do with Characters and plot itself.
As for Kid (Schala), i think he meant that Shadow magic is destructive magic, which it is. Schala most likely is a Shadow Innate. And I hold onto the belief that Shadow magic is true magic. That anyone who has Shadow magic can use Lightning,Fire and Water magic. Basically, Shadow magic split off into the other 3 when the Zealians stopped learning magic and just leeched of the Mammon Machine. In other words, the purest form of usable magic was Shadow. That's why Magus, being a Shadow Magic dude can not only use the other 3 innates even though he isn't of that innate, but he can also cast spells to transform people into Frog's etc.
And just like with Schala, she shows us that she can do more than an innate magic can do.