Coming to the party late (I purposely waited because this topic was moving far too fast to follow before), I thought it might be pertinent to mention a few minor points.
Early in the thread (yes, I read it all. And never again) people wondered why TE Magus "gave up" regarding Schala. However, I would propose that by discarding his memories, Magus was acting in true Magus fashion. He's been told that as he is he can't free Schala. Because he is so dedicated and determined to save her, he does the unthinkable and steal's Crono's spotlight. Be becomes a Christ-Like figure and dies (well, discards his memories, which is close enough) so that he might have a chance of saving her. If he can't save her as he is, then he simply has to become something else. He's not giving up, he's following Schala's advice.
Also, Faust, since Magus throws away his memories, AE might need to be changed accordingly.
It has been suggested that the clones in the dimensional vortex are the Ghost Children. Well, I have another idea that is along those lines. If Schala erases the memories of Crono & Co, then perhaps those memories manifest as the Ghost Children (helps explain why they know so much about dimensions, events, and the TD).
Regarding Dalton, it seems that either Crono & Co didn't actually experience fighting him, canonically, or they discounted Dalton's claims. The reason for this is simple; Lucca's letter to Kid in CC. She is afraid that someone from a discarded timeline might attempt to get revenge. If she remembered the experience with Dalton, it would seem like her fears would have been focused in that direction. Or she might have discounted Dalton and instead worried about someone more competent getting revenge. Still, Lucca's Letter implies that canonically (at least, until CC canon changes), Lucca (and thus Crono and Marle) either don't remember Dalton's threat or didn't take it seriously.
And just since it was brought up, Dalton almost assuredly didn't use Elements in conquering Guardia. At the time FATE was still in control of El Nido and its stated goal was to minimize its impact on the rest of the world and time. Allowing elements outside of El Nido would have gone directly against that. However, Dalton already can use magic and is knowledgeable to an extent (remember, he was originally in charge of the Ocean Palace construction and apparently he was trusted enough to see the plans for the Epoch, as he recognizes it from Belthasar's designs).
While Dalton as a military genius is unlikely, I believe he might fit better as a political genius. He's put in charge of the Blackbird, he was in charge of the ocean palace, etc. That seems to indicate he has a mind for managing resources. Militarily... meh. Zeal was essentially at peace, and peace-time generals suck. You need someone forged in war to be a competent military commander.
And finally, regarding the Lost Sanctum; if we assume that time there is analogous to time in the main game, then it cannot be the Reptite/Dragonian dimension of CC fame. This is for a very simple reason; in 600AD the inhabitants of the Lost Sanctum are still Reptites, but if it is the Dragonian dimension, they should have been dragonians (and they should have been highly advanced, approaching Dragonopolis standards).
Though, to be fair, there might not actually be a difference between Reptites and Dragonians. Utunnels discovered that there is no consistent naming methodology in the game (Reptites and Dragonians appear to be closer to Reptile-Men and Dragon-Men, the same sort of nomenclature applied to mystics and other things).
