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Oh fuck. I figured it out, I think. Merlin wasn't able to live so long because of a True Stone of Philosophy, of Immortality. He was a mind parasite. When he was getting old, he used a controlled version of how the Founders ended up in their hosts to transfer into a new body, probably when they were just an infant or later just made a new husk for him to occupy.
Rowena had knowledge of how this shit worked, which means Merlin knew how it worked. It wasn't his prowess in Transfiguration that let him seem to be a Hogwarts student. He had copied his mind into another body. It was the fact he could body jack people that let him live so long.
Merlin had all three of the Hallows. He was "The Master of Death". And the only way to beat death is to not play his game.
Laioken, the 5th Founder said the Spirit of Atlantis lived in him. Not the blood of Atlantis.
Merlin was the last of the Atlanteans, one who avoided them being ripped by time by jumping into a new body when what ever happened happened to them. Fuck, he might have caused time to destroy them to spite his rivals.
He sacrificed the founders, tried to create the Interdict because he saw how modern Wizards were progressing and didn't want anyone becoming more powerful than him.
What we are going to find in "Avalon" is a place Merlin could create a new body for himself and transfer his mind to it. Not a place of healing but of horror.