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[Summarized from the Apographa by Gilvas Barelo, Abbot of Holamayan, and various of the Dissident Priests]
Beneath Red Mountain, Dwemer miners discovered a great magical stone. By diverse methods, Lord Kagrenac, High Priest and Magecrafter of the ancient Dwemer, determined that this magical stone was the heart of the god Lorkhan, cast here in the Dawn Era as a punishment for his mischief in creating the mortal world. Determined to use its divine powers to create a new god for the exclusive benefit of the Dwemer, Kagrenac forged three great enchanted artifacts, which are called "Kagrenac's Tools." Wraithguard is an enchanted gauntlet to protect its wearer from destruction when tapping the heart's power. Sunder is a enchanted hammer to strike the heart and produce the exact volume and quality of power desired. Keening is an enchanted blade that is used to flay and focus the power that rises from the heart.
When Kagrenac used these tools on the heart in the Battle of Red Mountain, no one knows what happened, but the Dwemer race disappeared entirely from the mortal world. Lord Nerevar and Lord Dagoth retrieved these tools, and didn't know what to do with them. Nerevar asked Dagoth to guard the tools while he went to consult with his counselors, Vivec, Almalexia, and Sotha Sil. He left and spoke with his three counselors, and they decided to return together to Red Mountain to decide what to do.
But while Nerevar was gone, Dagoth was tempted and confused by the powers of the tools. When Nerevar and the counselors arrived, he refused to give up the tools, claiming he had sworn to Nerevar to protect them. Then Dagoth fought with Nerevar and the counselors, and was mortally wounded and driven off, and the tools were recovered.
Then Nerevar and his counselors decided to take the tools for safekeeping. They all swore a great oath never to use the tools, but after Nerevar's death, Vivec, Almalexia, and Sotha Sil yielded to temptation. They took these tools themselves and went to Lorkhan's heart buried beneath Red Mountain, and gave themselves divine powers.
But Dagoth had not died. We don't know what happened, but this is what we believe. His experiments with Kagrenac's Tools had joined him to the heart's divine nature in some way, so that he learned to draw power directly from the heart.
We conjecture that Dagoth Ur, driven by anger and greed, used the heart without caution and restraint, and, as a result, he has become terribly powerful, and terribly mad. But the Tribunal showed great care and restraint in their use of the tools, and so they were not driven mad, and they did many good things. Nonetheless, the Tribunal, too, appear to heave been corrupted by the heart's power, though more subtly.
Kagrenac's Tools are cursed. Stealing power from the heart of a god is a terrible folly, and fated to disaster. The Tribunal is losing its battle to control the power of the heart. They are sustained by the same tainted power that drives Dagoth Ur mad. They grow weak, and cannot protect us from Dagoth Ur. But even if they could, would we be wise to worship gods such as these? They conceal the truth from us out of shame. They persecute the Nerevarine and the Dissident priests out of shame, when they should be welcoming them and enlisting their aid against Dagoth Ur.
The Tribunal have done much good for Morrowind and the Dunmer. But they succumbed to the temptation of Kagrenac's Tools, and though these tools once may have seemed the instruments of salvation, now they must be seen as instruments of doom.