For what it's worth, I'd be extremely wary of using the Death Trilogy of adventures as any sort of canon as far as estimating Azalin's (or indeed any other NPC's) abilities.
The trilogy was among the Ravenloft products I enjoyed the least, being poorly written and poorly edited. Even these could have been forgiven if it was at least well-designed, and it wasn't that either.
(To be fair to it, there were some excellent ideas in it that could make for a truly amazing adventure trilogy... had the 99% perspiration work of editing, writing, and revising been better. I chalk this up to problems with TSR's disintegration rather than lack of talent, so I don't mean any insult to the authors. The artwork was pretty bad, though - no amount of spin will ever erase my revulsion at "a few bones here and there" making for good incidental artwork.)
Of course we go to the DnD table with the Grim Harvest we have, not the Grim Harvest we wish we had...
The mechanics behind the hourglass artifact are never satisfactorily explained. The game is a clear example of railroading - the PCs can't even affect the outcome of Azalin's plot! A better way of pitching that might have been to require a lengthy conversion process to make Azalin's consciousness into a demilich. Say a few weeks or months, spent channelling negative planar energy into his consciousness so he finally gains enough dark power to become a demilich (something that most liches take centuries or millennia to acquire).
This would allow the PCs to realize what's going on, and allow them an adventure detour to do something like "pee in the rice cooker" (a Chinese term meaning to spoil things for everybody else). Say Azalin needs a certain amount of negative planar energy and has arraigned his legions of high-level undead to wait so he can suck them dry. If the PCs go and assassinate the highest level undead before the machine takes them, their negative energy dissipates harmlessly, reducing the amount of energy he gets. [This is a neat inverse of Styrix's Rift Spanner machine, which runs similarly on positive planar energy leeched from the living.]
Alternatively they could destroy the machinery that powers the process, though that would probably mean their own deaths. Just purely arbitrarily, I'd say there might be "batteries" that store the life force, "focuses" that blast them into Azalin's chamber, and then a "transmitter" that projects Azalin's consciousness through a planar rift once he's a demilich. Disrupting one or all of these would result in the exact chain of events as per canon - Azalin does not become a demilich, and he remains dispersed and impotent around the demiplane.
Yes, yes, these are house rules. I'm just jamming a few ideas around. Don't mind me.
Logically, this brings up a few other questions that an enterprising DM probably ought to answer (or at least fudge constructively). Why would Azalin be any different from any other lich? Why would he be able to short circuit this lengthy process to become a demilich?
For a start, some liches probably don't
want to become demiliches. True, it's a liberation of sorts, and the demilich form is very powerful, but liches may be loth to relinquish their mortal shells out of some ties to the material plane. Less sentimentally, perhaps liches, like Azalin, have plans that they still want to complete in the prime material plane and they've sunk too many costs into them to abandon them.
The second theory has a lot to recommend it. Azalin allows Darkon to decay slightly (or at least, saunter gently towards entropy) in the years before his intended transformation. Most obvious among these is the fact that he ignores the growing threat from Tavelia, the renegade Kargat vampiress, who clearly intends to supplant him in power. This is clearly in keeping with a man who has other things on his mind and doesn't intend to be around because he'll be gone. (Think a corporate CEO who allows the company to atrophy because he knows when the unflattering quarterly report comes out, he'll already be on a jet to assume his new CEO post at the competing firm.)
Another issue is why Azalin, of all liches, can accelerate his transformation so quickly. There are plenty of liches in other realms, but few who ever make the transformation, and all of them take millennia, megayears, or even aeons to accomplish it.
One possibility is that almost universally, liches are hated and shunned wherever they go by living creatures and civilization. Most liches are found in dungeons or remote areas because they cannot risk being found by civilized creatures who would quickly attempt to destroy them. This means they can remain a threat for almost indefinite periods of time. However, it also retards their researching abilities.
Azalin is a rare exception to this rule. He surrounds himself with people, and takes far greater pains than usual to fool them that he is alive. He even goes to the trouble of throwing masqued balls for them, offering them temptations that he himself is completely unable to enjoy (which include wine, women, and song, but probably also include more perverse things). It's entirely possible that Azalin has more live human innovators working under his command (whether they know about it or not) than almost any other lich in DnD canon.
Think of Azalin as a patron king, somewhat remote in his palace geographically, but still very much in the thick of things politically. Occasionally he may deign to do business with the toadying lord or baron, but by and large he is primarily interested in finding the diamond-in-the-rough spellcaster who can innovate, and whose talents can be bent to his aims. Armed with a network of these experts, Azalin can subsidize their research and reward them greatly, knowing that eventually they will die unless they become liches like him. (And those who do become liches usually do so under a vassalage arrangement.)
So even though Azalin is only a level 18 wizard lich, he has disproportionate purchasing power at his skeletal fingertips. Things that might take a single lich, working in solitude, several centuries to complete, may only take Azalin's streamlined research structure a few decades to achieve.
Depending on how much he knows about the demiplane, it may simply boil down to him building the magical equivalent of a Saturn VI rocket and launching himself into space with it. Of course, he might have to hope that the Dark Powers are in a good mood that day and let him out... (To which an appropriate analogy might be: if you were a kid and had spent the entire day shaking a cola can up and down until it had achieved explosive pressure, are you seriously telling me you wouldn't want to spray it at something just for laughs?

)
The Dark Powers might let him out for a variety of reasons.
i. This reason is always valid if the DM wants: they're arbitrary. No more needs to be said.
ii. Possibly they've enjoyed his development into a really nasty demilich under their watch, and now it's time to let him go back and cause mayhem and destruction in the prime worlds again.
iii. Perhaps they can't stop him. This is arguably the most controversial one, requiring as it does a direct comparison of demiliches vs. dark powers and possibly even bringing the CR rating of gods into it as well. I do not have any comment on this save that it's DM prerogative.
There was going to be more but I'm sleepy. Maybe this should go into its own thread, as it's not really commenting on From the Shadows but on the Grim Harvest trilogy.