Morrowind, if the devs pay any attention to basic physics, is screwed. The Ministry of Truth crashed with enough force to turn Vivec City into a crater; not a pile of rubble, a -crater-. Simple mass alone would not do that; and it simply was not high enough to gain enough gravitational acceleration to do it, either. Something unleashed enough energy to vaporize both Ministry and Vivec; something either exploded, or contained said energy, and the disaster caused whatever was containing it to fail. The crater is big enough to have earned the name Scathing Bay. =Then= Dagoth Ur went BOOOOOOOOM! There are no mountains around that inland sea to deflect the blast front, flame front, or pyroclastic cloud. Even the wimpiest volcanic eruption unleashes multi megaton level energy; odds are the Ministry's fall and Vivec's devastation fractured the island (which, being in the middle of an inland sea as it was, -had- to be volcanic upthrust......meaning that whole area was an active caldera). If the bay water hit that magma pocket........
What's left of Morrowind is in the time of Skyrim known as The Wastelands. That kind of gives a hint as to just how massive that volcanic explosion had to be. If there is any island left at all, it probably is new upthrust. The effects would have been global, and you can bet there was damage in Skyrim & Cyrodil, at the very least. The question is which way the prevailing winds blow; if they blow west to east, then the majority of the ejecta was blown out to sea. If east to west, though, then Tamriel got ashed big time (the assumption is west to east). If they are still wastelands over 150 years after the initial event, then it was cataclysmic. Regrowth usually starts within the first 30-50 years.....and if it hasn't.....
Actually the Ministry of truth was held in stasis, therefore retaining its velocity from the time before it was froze in the sky.