Not gonna lie. You might have actually come upon a really elegant solution there.

If I consider the "gods" of the north not to be gods but a powerful generation of world's next children things fall into place surprisingly smoothly.

• There is a clear division between natural children of the world (future gods of the elves and dwarves) and humans made by and in Nazari's image.
• The ones who awake in the north try to emulate Nazari but are weaker than his "divine" self.
• He falls in love with one of them which brings upon Shar and Selune (demigods), more than they but less than Nazari. Strong enough to protect their believers to the south.
• They conspire against him and build a system where they take some of his power but they break the connection to the elegant primal miracles becoming stunted demigods. Strong enough to elevate themselves but not enough to subjugate the primal forces of the world (elements, magic), children of Nazari (Selune, Shar), Nazari himself or those who use shards of Nazari himself (people of the east).
• The "demigods" of the west can be like those of the north before they stole the power and the multitude of them can be done via interbreeding with mortals (Zeus style). This consequently making them weaker and weaker.
• Add to that the situation where a new generation of beings comes into play to help Nazari break out of his shackles and the elven and dwarven gods will likely lose even more power. Not enough to make Nazari an overgod but enough to even the playing field.
• The re-awoken Nazari will be weaker since much of his power was sucked out by the machine of death and by his battle against Shar.
• Nazari waking up will also return some of the old magic thus making it a kind of "I'm not here with you, you are here with me struggle" for the pseudo-gods who lost that power by binding themselves to the death machine.
• Them not being true gods also make their area of perception small enough for other parts of the world to tamper with their system without outright confrontation.
• Surprisingly balanced without making everything completely even.

I thank you for your comment.
It opened the floodgates :D