Alright, time for an effort post!
Boney is an excellent world-builder, as we can all agree. Thus, even if we don't know exactly what's going on, we can reasonably expect that whatever is happening is consistent with the facts we've gathered (up to illusions, etc). Thus, let's follow the maxim 'Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth."
Facts (in no particular order):
1: Borek is significantly more ashamed of whatever happened here than he was of direct commercial dealings with Chaos Dwarves. Additionally, he was resigned, rather than surprised, upon seeing Morghur.
2: Karag Dum is no longer part of a mountain range, and is now at the bottom of a crater, surrounded by (temperate, not arboreal...) forests with a sudden demarcation to desert.
3: Karag Dum is exuding an environmentally massive amount of heat, described as a "hot, gritty wind that seems to be blowing directly into [Mathilde's] face."
4: There's a whole bunch of bones and banners sitting outside the area, and it's a known spot to challenge Morghur for the favor of the Dark Gods.
5: Morghur greeted Borek with an intimate gesture, and Borek let it happen.
6: "As you watch reality flinch away from him, Morghur the Shadowgave, immortal demigod of the Beastmen, bellows a warbling prayer to the mountain that has become his Herdstone, and from the trees countless more voices join him."
7: There's less Dhar here than in other areas of the waste.
Theories:
A: Karag Dum managed to trap/bind Morghur.
This theory is inconsistent with [5, 7]: Morghur is a chaotic evil Beastman demigod. He ain't caressing nobody, and he ain't reducing Dhar taint.
B: Karag Dum is impersonating Morghur with e.g. a Runesmith
The smallest issue is that this naively seems to contradict 6 & 1, to a greater or lesser degree: how and why would a Runesmith let out a prayer to a Herdstone? It's possible that this is just poetic license, but if it's not, then that's an issue. I'm also not convinced that tricking beastmen into playing defense is so much worse than trading with Chaos Dwarves.
A slightly larger issue is that this doesn't account for how Karag Dum has kept the beastmen from doing the usual 'mad offerings, chieftains scratching their name on it in Dark Tongue, etc' thing.
The largest issue, however, for me is that this theory is incomplete. It doesn't begin to explain 2, 3, or 4. This means there's a big missing piece (or several) to the puzzle, somewhere. 'Runelord Illusions' doesn't explain how or why the Dawi of Karag Dum built/maintained a temperate forest in the fucking chaos wastes, deleted a mountain range, and transported their mountain to the bottom of a weirdly even crater. It also doesn't explain (at all) why it would be throwing off so much heat.
C: [ELGI INTERFERENCE] + or - Impersonating or taming or raising Morghur
This is the one that makes the most sense to me. It doesn't directly contradict any of the facts that we've gathered, but it also begins to address why and how Karag Dum may have semi-transported itself to a different place. Magic + Runes also opens up a vast possibility space for how they might do things and allows the possibility (if this is Athel Loren) for these being e.g. dryads in an illusion. It also very conveniently fits the timeline Boney gave us for Morghur.
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