Not sure what the problem is there - I've just tried it and each of the Students is able to spread in the same way as a Disciple/Thane/Acolyte etc. The "Spread Automatically" option also works. Can you try it again and let me know if there's a problem, preferably with a savegame?
They're crazed - studying the Overlords is not good for your sanity. The Crazed promotion is used on Lunatics and grants Enraged periodically. The Students of the Overlords have the same problem - though turning Barbarian straight away is just really unlucky - there's only something like a 3% chance. In anycase - if you want to spread Overlords - do it quickly, before the students go completely raving mad.
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I could have sworn the spread religion button was missing for the Students of Kilmorph...but, I see later it is there. ROK finally spread automatically some several hundred turns later.
I wonder if an instant Loyalty promotion (if they are built in the city that has the Statue that gives the promotion automatically), might not prevent them from going barbarian???
OK, I played another 200 turns to turn 600 and ran into a few problems that may be related to the Dural civ.
First, you cannot built priests, etc. so I cannot see how you can get Medic II. The Grigori at least have their Medic unit, but I don't see any like that for the Dural.
Second, I ran into a real problem with Disease. I was constantly at war with the Svartalfar who had AV and was churning out the Diseased Corpses. At least half my army was diseased in combat and I had no unit that could cure disease. Again, other civs have priest units that can get Cure Disease and you have the Grigori Medic. I think the Wonder Aqua Succellus helps, but you need Life mana for that. Maybe there should be a special unit for the Duval with Medic II and Cure Disease...unless I am missing something.
I ended up converting back to ROK (losing Valin) so I could build Arthendain to cure my troops and provide his medic skills.
Third, I saw something about professors? I forget where, but it said you had to build colleges. I couldn't figure out either of these.
I'll probably get the hero for this civ tonight and see how that works.
Hyborem managed to spawn in the 4 tile space between my civ and the Bannor (I never understand how he spawns as there was tons of open space on the map, but he was stuck there). I killed him and his lot in one turn, but the damn hell terrain still formed next to a decent-sized lake so it appears impossible to get rid of - and he didn't even last a full turn on the map!