Well, I was talking about the "Empire falls" part - which, as You said, isn't true. And we can hardly judge the Empire's strength because of this info - Morrowind is in a large part a (often poisonous) wasteland. Thus there is no point in reclaiming it. And about the Dominion... Tiber Septim himself was able to defeat it only after using the Numidium - and I'm willing to bet a lot that the current emperor doesn't have a giant stompy robot which can bend time itself
I was going by a translation of a recent French gaming-mag article, which mentioned the whole "Empire-falls-to-the-Elves" thing, but if this was an error, I stand corrected on that.
It makes one wonder, though -- if Max Von Sydow's character is supposedly the "last of the Blades" (or else
one of the last ones left), how does that affect what we currently know about the Empire's status as of the timeframe of TES V? Has the Emperor been driven into exile, maybe? Does the Empire "rule" Tamriel in name only, similar to the Ravenna rump-state after Rome's collapse?
The first novel notes that Titus Mede apparently conquered Cyrodiil after defeating a previous Emperor's armies; who could very well have been the new Emperor selected by Chancellor Ocato and the council following Martin's death. Is the Mede line still active, and will this get addressed in
Lord of Souls? If Keyes is working even somewhat closely with Bethesda on these books, you'd think they'll be giving him a few foreshadowing elements to place into the next one, in order to effectively set the stage for the events of TES V.