OK, having looked at all the evidence and posted on the Asylum a couple of Leveller/Head-related threads, this is what I have concluded: The Leveller is "a transient divinity that seeks only conflict" (Myht II Epilogue), meaning that it only remains for a brief time, as we know. The popular theory is that the Leveller "posseses" people. However, this cannot satisfactorially explain why Moagim, after the Leveller leaves him, remains just as evil and destruction-bent as before, and why Connacht, who if possesed would like the Myrkridia, as he brought them into the world, is enraged by the sight of their standards.
Therefore, after musing on this, I came up with what I feel to be a theory that satisfies everything known about the Leveller without having to bend parts of my theory or reinterpret Myth lore.
I believe that the Leveller does not possess, but rather corrupts its chosen host to the same nihilistic and utterly evil level it is. It is a "divinity", so it would be able to corrupt anyone, no matter how noble. It cannot control, as it does not possess, but it does not need to - the Leveller, desiring only total destruction, must be the lowest level that any sentient being can sink to, and so when it has corrupted its host (for lack of a better word), it would desire exactly the same, nothing more, nothing less.
The Leveller chooses to corrupt those who defeated it because they were the greatest men that it knows of. Who better to turn into a destrucion-obsessed madman? I also believe that the Leveller retains the knowledge of its past hosts, and gives that knowledge and experience to the next hosts. This would explain why in the M3 manual it says that every age the Leveller would become more powerful, and also why Moagim and Balor knew how to summon creatues from different worlds, but not Sorangath or any others. If they had known how, they would have. Tireces was apparently the greatest mind of his age too, so he may have known this sorcery, and so Moagim would have known how to use it. Connacht didn't, but since the Leveller now knew how, Balor would have.
This also explains why Moagim Reborn and Mjarin's Head are still evil, despite not being the Leveller (remember, Moagim used to be Tireces, who was very much a Good Man), as they are corrupted permanantly.
It also explains why Balor balks at the sight of the Myrkridian standard. If the Leveller could control him then he would not care, though maybe he would be a bit confused as to what exactly Alric had been thinking by climbing a pile of skulls, but he is clearly enraged, as he is still Connacht, just corrupt. Similarly with Moagim Reborn - still Tiresces, just corrupt.
It may be that the Leveller isn't an entity as such, but more a state of being - the Epilogue to Myth II refers to "powers" that set the Cycles in motion - maybe they select the next Evil Destroyer and simply make him really nasty.
Tell me what you think.
