I, too, think it'll be set in the past.
I also hope the PC will be a blank slate, much like the Dragon Knight in Divinity II. Mind you, I wouldn't object to Lovis and Talana and the others showing up. I'd especially like it if we could choose to ally with them or fight them (or just not to bother with them).
If it set in the deep past, then I don't think we need to worry overmuch about an ending that basically goes "And then the Dragon Slayers killed you, lol". The story would have to last up to and through Divine Divinity and beyond, and that would lead to all sorts of trouble. More likely, the PC's ultimate fate will be left unknown.
