GabeN;
So, the same Black Ring that was almost destroyed and before Damian couldn't even beat Humans with the help of Orcs
After the events of Divine Divinity, The Divine and his Paladins were kept fairly busy going after Black Ring members, so the ones defeated in DD didn't cripple the organization. Damian was only just starting to have his powers emerge when The Divine drew him to the rift temple and banished him.
somehow managed to completely destroy Elves, Dwarves, Lizardmen and other races in a few months/years?
With his powers grown, the ability to open rifts to other realms, the organization built up on Nemesis (pre-Beyond Divinity) and alliances formed with powerful demons, etc, I think his second campaign would almost have to be more successful than his first.
Elves with a few cities we heard about in DD, Dwarves who said that in case of any attack, they can hide forever in their city?
They may still be there, for all we know. There are none left in the locations we can visit in D2:ED/DKS, though, and they have not been in contact with those humans.
LightningLockey;
There were Lizard people in Rivellon in BD, so they didn't get wiped out by the Divine.