Good theory, but there are two points I have to disagree with.

First, I don't think Ermac dispersed after MKT. We know Kenshi "freed" Ermac, but what that means is left up to interpretation, but I believe it meant Ermac was contained under the orders of Kahn and Kenshi freed him from these shackles. I don't think it meant that he reverted back into the thousands of souls that he's comprised of. After all, he had to have been in physical form when he taught Kenshi telekensis. But I do agree that Raiden's sacrafice might have influenced both his being and his actions.

The second point I disagree with is the status of the DA. I don't think they're working for the DK now. Actually quite the contrary. One of the stages might have confirmed my believe that Quan Chi went into hiding. I honestly think the deadly alliance is scared shitless.

It's entirely possible, TinMan. Hopefully the next set of bios we get includes Ermac so we can see if this happens. Good theory.
Edit: Temp - I'd be scared shitless too.

Hey, sorry to bump this but I wanted to see what others think of my theory and re-posting it would have been spam IMO because I've posted it here already.

Interesting if you ask me.