If Damien died (I don't know either - guess I'll have to play OS II (I think that occurred afterwards) - there's a ready made new villain - the mage under the academy that you may have not released. It was said somewhere that if he was released, we'd just have a second Damien. He wouldn't have the chaos spirit in him (although I suppose by the stroke of a pen that could be changed) but is ready made to carry on the theme and could be easily released. After all, Lucian was "dead".