What I don't get is how this eruption could've been so bad, they went through it once already. From the UESP:
1E 668 - The War of the First Council; Vvardenfell erupts.
The first eruption of Morrowind's gigantic volcano, since known as Red Mountain. Ash spewed into the sky hides the sun for a year.
There wasn't an Oblivion Crisis a few year ago that royally screwed up the dunmer, there was no MoT that fell, the military houses weren't in extremely steep decline and being picked apart by the other houses, the dunmer people were, more or less, united under Indoril Nerevar and the Tribunal, there wasn't the Tribunal around to magically make everything better, and they were not fending off nord and orc raiders immediately before the crisis.
What happened was a string of extremely unfortunate events, something the Hist had been waiting for for a long time.
Well since it didn't reach Solstheim most of the mainland is probably fine too.
We have yet to hear or see what Solstheim is like right now or was like when Red Mountain erupted. They too may have been hit by ash, or the winds may have blow it southwards, which would have badly affected the mainland dunmer and not so greatly affected Solstheim.
Honestly, I think this is poppycock. Poor writing by whoever wrote the lore. An explosion of the magnitude described by the damage in The Infernal City would had definatly cause damage to Solstheim. Even if there was a hurricane at the same time that blew ALL the ash East out into the ocean there still would have been massive tsunami's. I mean, it's just not possible that the island wasn't touched. Whoever wrote this lore didn't consider the full extent of the damage a massive volcanic eruption causes.
Alright, so what's going on in Solstheim, other than a bunch of dunmer living there now? We no next to NOTHING about what Solstheim was and is like right now.