I liked the ending though.
Conerning all this Gods, as my understanding goes, Engwithians developed these soul-capturing machines, figured out that there is no greater power to stop them from using them, decided to create artificial "gods" themselves. Well, the gods were created essentially from the souls of Engwithians. So Engwithians cheated everyone, they continue to rule over all the civilizations in form of "gods". That's why the rule of these "gods" can continue only until the secret of the their creation is discovered. That's why the Engwitians decided to cease to exist (as mortals), so that their secret will die with them.
The question that Iovara poses in the end is whether a comfortable lie better than an uncomfortable truth.
Concerning the ending battle itself with Theos is very easy, especially in comparison with Adra dragon. I attacked him with level 6 psionic/wizard paralyzing and weakining spells, he got paralyzed instantly. With an concentrated attack from all my party he went down in about 5 seconds, really didn't even managed to cast a spell.
And I would agree that Theos is probably not as charismatic as Sarevok.