Sorry, but the Entity is gay.
It used Crono and co to do what it wanted, then had Belthasar save it again. In the end, the entity is controlling Belthasar, since he's just a part of it's dream. Besides, the Entity is a panzy.
Anyway, it was stated that Schala caused everything to happen, not Lavos. Remember, Lavos is almost dead. He's clinging onto Schala for life, so that means hes depending on her life force. So he binded her, and started merging. She heard Serge's cries and wanted to free herself from Lavos. This attempt of trying to escape Lavos ended up with her tearing a rip in time, trying to escape the DBT, but all she could do was create Kid, send her out into time, and unleash the storm above Chronopolis, and send Serge/Wazuki/Miguel all to Chronopolis. She probably sent them home too, how else would they get past the coral.