there are a few theories I have
1. Terminator theory (their machines overthrew the masters) but it doesnt explain there are no bones ect
2. All the dwermer dug so deep and closed the entrance behind them
3. The dwermer took on the planes of Oblivion seeking power and lost against the deadric princes (because then it would account for having no traces of bodies)
and the princes swore not to talk about this war because it could question them as deities
No, they were absorbed by the Numidium and then exploded.
There was no enlightenment, there was no spiritual existance for the whole race. Kagrenac(sp?) used his tools to manipulate the heart and the whole race got svcked into his giant stampy robot.
The did it in an attempt to return to devinity - as it was their belief that they had once been a single devine entity that had multiplied in order to survive. With each multiplication (generation) they got further and further from their devinity.
Thus the idea behind the giant stampy robot.