If Magus was affected by the Masamune just because it was made of Dreamstone, then he would've known it could do that already. Instead, after defeating him in his castle, he is suprised. The sword was made of Dreamstone before it broke and after it was fixed. That is why Frog is the reason the Masamune worked so well on Magus.
Thats not a very stable conclusion. "This happend...so it was Frog!!!!"
nah. Besides you seem to be underestimating Cyrus's will to slay Magus. The Masamune is a magical sword with magical properties, so it doesnt really matter who uses it, if they know what they are doing, they will gain great power.
New thought: Remeber the Amulet Schala gave to Janus? Assume it is made of Dreamstone. Now assume (from Schala's statement "it will protect you") that it is full of Lavos energy. Now assume that over time Magus absorbed this energy from the Amulet into his own body. Now part of his power is from Lavos. Allow me to go further:
1) The Masamune absorbs some of the Lavos Energy within him, thus weakening him.
2) At the Ocean Palace, Magus attacks Lavos, yet...nothing happens at all, he uses his best attack (where a red object, similar looking to the ruby knife is involved) and nothing happens.
3) Perhaps Lavos energy is involved in the attack, meaning it cant hurt Lavos.
4) Lavos absorbs all the "tainted" (Lavos energy affected) powers from Magus, leaving him with a few simple innate skills.
5) Lavos tainted skills never return because they are not innate. The only example from Magus that I can think of is Geyser.
This is, of course, assuming that the Amulet is made of Dreamstone, infused with Lavos energy, and involved at all.