i think it is more likely that the effect simply wore off. the way i understand it vehk simply banished her from nirn and/or closed the gates to hear realm. since oblivion took place some time after the trial azura has had time to get back some of her powers of communication.
Is that kind of like the Battlespire thing, where Dagon was banished then did his Daedra thing and came back?
As for the rumors in Oblivion, that's just one rumor, the one that hit Cyrodiil and caught on. I'm sure there are lots of rumors going around Morrowind as to what happened, with some around the eastern parts of Skyrim floating around, changing and getting more bizzare over time. And like what happened to Vivec, we may never wnd up hearing the other rumors for sure, since right now the people of Tamriel are probably more concerned with the impending political turmoil than the whereabouts of some false god from a backwater country filled with rude xenophobes and very few (but a couple) profitable exports.