I think the entity is the one behind the mammon machine, and the black omen.
Yes it sounds crazy, but lets look at the fact.
One day, the kingdom of Zeal, found a way to harness the power of Lavos : the mammon machine. Queen Zeal, then decided to abandon the other energy (the sun stone), to only use Lavos energy.
Later, the ocean palace was created, to permit to steal even more power from Lavos. The ocean palace, once activated, Lavos awoke, and destroyed the kingdom of zeal.
Then the Ocean Palace became the Black Omen, still sucking Lavos energy.
Why would Lavos let the Black omen do this? He just destroyed Zeal to stop it, didn't he?
Why would he even want the human to harness his energy in the first place?
Lavos has no reason for letting human harness his power. He feed on the planet energy. It's his food, it become his energy. The mammon machine stole the energy of Lavos, it weaken him. Lavos certainly would not want to be weakened.
The entity on the other hand, would be more than happy to weaken Lavos.
That's my theory.
The entity, used the kingdom of zeal, to weaken Lavos. The entity guided Zeal so that it would discover, and use the energy of Lavos. The entity manipulated queen Zeal, profited of her insanity, maybe caused it, to make her absorb even more the energy of Lavos. Lavos sensed the threat, and destroyed the kingdom of Zeal. But the black omen was completed, it stole the energy of Lavos, and use it to maintain itself undetectable, or at least out of reach.
Hence, Lavos, was slowly weakened. This permitted Crono and his companion to finally take him out.
So what do you think, of this theory.
Doesn't it make more sense, than if Lavos manipulated Queen Zeal?