I've long toyed with a theory that there might have been an untold chapter of the Phantasy Star story that takes place long before PS1. We know, thanks to Lashiec's return for PSIV, that servants of evil can be revived long after their death. Something that is often overlooked, however, is that the first instance of such a revival is actually in the first game.
We are told early in the game that Medusa has been "reborn." Isn't that an interesting term there? If she was "reborn," then she must have been dead in some fashion before, yes? Later in the game we learn she was defeated by Perseus long ago. Clearly this is a reference to Greek myth, an area PS draws much from. But within the context of the game, it means some close approximation of that myth - in which, Perseus kills Medusa - played out on Palma.
That begs the question, why was Medusa reborn? What is so special about her? My theory is that Medusa is the "original" Lashiec - a servant of Dark Force, restored to life by evil power. Like Lashiec in PSIV, she takes a "vital" item - the Laconian Axe for Medusa, the Eclipse Torch for Lashiec - and hides it away in a dungeon. This could, by extension, mean that Medusa worked directly under an ancient form of Dark Force, one we have not seen yet. Perhaps Perseus defeated it.
What do you think of this idea?