...I'm sure I'm opening up Pandora's box with you here, but there are statements directly stating he is/was involved:I mean that was once again headcanon from Aqua and company that N'zoth was behind it. It was never even mentioned that it was him.
On topic, this also pretty much ensures that his little handmaiden didn't get empowered to the degree that people keep claiming. Only the transformation saved her from drowning and/or becoming a wretched with all the magic she used.
https://www.youtube.com/watch?v=d343AvMF4yA&t=5m54s
http://us.battle.net/hearthstone/en/blog/20073614/
And the Ultimate Visual Guide.
Also no, there's no suggestion about Azshara's actual power in what it says.