Alright, took me a while to read the discussion, here is what i think:
"I wasn't aware that Karag Dum would know of the network," you venture.
He smiles bleakly. "Karag Dum remembers much that others have forgotten, even when some might prefer we didn't. Even when we might prefer we didn't."
We have been focusing too much on what is going on and not enough on why its going on.
Karag Dum knew of the waystones, and thus almost certainly of how important they are to the rest of the dwarfs.
This isn't Karak Dum falling to chaos or enslaving beings, this is the most important dwarf trait, the weight of responsability.
1) Cor-Dum was last seen much further south, and no evidence of it ever moving north, thus he arrived him in some other way, since we know that he is reborn after slain the logical explanation is he arrived here that way.
1a) The timing of the resurrection and the fact that Borek recognized it implies the resurrection was not random, Karag Dum knows of a way to bind and control both Cor-Dum and his resurrection process.
1b) Thus Cor-Dum has always been in Dwarf control, they just choose not to use it, Cor-Dum is either a Dwarf creation or was bound a long time ago.
2) Cor-Dum's chaotic nature seems tempered, he is not uncontrollably mutating the environment and seems to possess intelligence
2a) Cor-Dum was reborn here, he was reborn a dwarf, Umgi are soil, Dwarfs are stone, a Dawi Cor-Dum can maintain his mental faculties and have some control over his power.
3) There are more beastmen here, under Cor-Dum's control, Beastmen have volition and thus agree with Cor-Dum's overall goal.
3a) The beastmen are all dwarfs.
4) The mountain has been to a degree transformed into a Herdstone or Herdstone equivalent, the mountain is now sorrounded by Forests, Cor-Dum possesses Dwarf intelligence.
4a) The herdstone was placed intentionally with Dwarf help, the Herdstone's effects are to the benefits of the dwarfs, the beastmen are in their element in a forest, the Herdstone created the forest.
5) The desert sorrounds the forest and ends abruptly, the desert is covered in bones, an open environment favors cavalry.
5b) The desert was not created for or by the dwarfs/beastmen, Chaos created the desert.
5c) To counter the herdstone, energy needs to be used to maintain the effect, somewhere nearby someone is sending energy to maintain the desert.
6) Cor-Dum is the dwarfs name for Morghul, the letter C does not exist in Khazalid, Borek recognized Cor-Dum, Kor as the closest equivalent is used in Ankor, meaning realm or kingdom.
6a) Cor-Dum is Kor-Dum, Dum's Charge or Dum's Domain, possibly both.
[X] Theory: The Dwarfs have control over Cor-Dum and is likely being controlled by Karak Dum's King or Leader, They are doing this to protect the Waystone and keep the Karak Ankor safe, there is an ongoing siege to take control of the waystone with a nearby source providing power to the desert to weaken the defenders.
[X] Action: Look for the source of the desert.
As explained above, this are not the dwarfs doing this for themselves, this are they sacrificing themselves to keep the Karaz Ankor going, we cannot save them, but we can honor their sacrifice, we can allow them to hold for longer. There are likely living dwarfs inside the hold still, and everytime Cor-Dum dies he is reborn and reforged anew by a new wielder.
After we disrupt whatever is holding their forest back, we should make contact and ask if they wish to send a message or some relic back to their people.