I am pretty certain Bethesda will never explain it 100%. Leaving it vague and several different accounts of the same event written by the different sides is what makes the lore so appealing. The actual events that lead to the disappearance were accounted in several books each hinting at a different take on the story. While I believe Kragrenac made the tools to transform/ascend his race, I think its much more tragic if the members of the tribunal actually had a hand in it. We know it happened around the battle of red mountain. What if Nerevarine, Vivec and the others made it into the heart chamber and attempted to use the tools to win the battle. Perhaps because they weren't quite fluent in the tools use or perhaps just a simple miswording or misunderstanding of the power they were handling. To me that makes a much more tragic image and an even greater secret that the tribunal had been hiding. Imagine the massive guilt realizing that instead of just ending a battle you had ended an entire race!
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