I know it's been a long time since I've been active here, but the new release is bringing a bunch of people out of the woodworks, it seems. Picked up both the game and a DS over the weekend, spent all weekend savoring it (working on the sidequests post-Crono revival now), and decided to stop in and see what was up. Found this, though, and had to weigh in with my two cents.
So, does this means that the whole Dream Devourer thing is a 'post-game event'? It could make sense that way. Although, how would they get there I don't know.
The point is raised that since this takes place in the old save file after beating the game, where does the fight take place? Is it in a world after Lavos' defeat, or before? Why does it have to be clear cut?
If we assume that Lavos' defeat pushes him into the Tesseract, where he joins with Schala, then there is no problem here. After all, the Tesseract is a side dimension, and is equally accessible from 65,000,000 BC as it is from the End of Time. Time flows differently there, so Lavos is present after you end the game, even though you haven't beaten him yet. Both he and Schala are there, despite Lavos still threatening the world, because you shunted him there earlier.
All it requires is thinking of reloading the old save file as a form of time travel. You're taking the characters back in time to a point before Lavos was defeated, but the Tesseract is unchanging. It doesn't care what you do, it will remain the same.
Anyway, that's just my two cents; we'll see how they hold up despite having been gone far too long.