That's exactly how I see the whole demon king shenanigan. The way I see it, he (it?) got its proverbial claws into Lyon long before the whole possession thing by amplifying his insecurities through the creeping stone-aura or whatever, and that everything from his crippling insecurity to the decision to research the stone further were all caused by that.
Honestly, I don't think at any point in the game you see Lyon for who he really was - even in the flashbacks, he was already affected by the situation.