I'm surely a bit late too here but good luck if this project is still on tracks ! Always interesting to speak and have things about Phantasy Star 3, that is really a masterpiece in the serie and in the RPG galaxy ! The Orakio/Laya war is a great starting point as it was still very mysterious (I've read a fanfiction about it and it was great ! But I can't remember the name of it now....)
PS : Yes ! I've found it back on the Phantasy Star Pages ! The name is "In the Name of the mother" by Michael Hahn ! That was a great fanfic which tried to explain this Orakio/Laya war, even if my souvenirs for it are far away !
