Your theory explains the apparent lack of a cycle in the Golden/Axe Age. I bet you're at least correct.
This would also explain how the start of the cycle seems to co-incide with the rise of human civilization. Before the One Dream was broken, there was no dream-based magic. Without it, there could be no avatara, so humans lacked powerful leaders. As soon as the runes appeared, people started finding them, and then they had someone to rally around. Probably just in time, too, because the dark gods didn't like it and sent the leveller to interfere, or maybe he came on his own.
