Yeah, I also at first believed that Silmeria had broken out of Brahm's prison. This however makes it a bit more interesting if you ask me. Silmeria was one of the more mysterious aspects of the first game and I'm glad it's getting fully explored.

Seeing how Arngrim is supposedly in I believe there's a good chance we'll see other characters such as Kashell or Janus ( <3 ) make a reappearance. Reincarnation is not a new theme, remember Hrist and her Einherjer? As for Lezard... well, my bet is that he put that time machine of his to use.