This is wrong on so many levels I don't know where to start, so I 'll just answer in bits:
You're ignoring positives.
Yes, invisible recon get spanked when visible, but you wont have anything left to make them visible. You probably wont have anything left period. Double movement in forests, forests everywhere, ancient forests, on every bloody tile. 70% attack and defense in those wonderful forests, with a 15 strength unit that poisons. Your beastmasters didn't start out as beastmasters either. They are the three best surviving satyrs and started with woodsman 1 and picked up subdue animal for free as well on upgrading to rangers. They wont be your only units either, being limited to three isn't some awful shortcoming. That just means that the three eidolons protecting your ritualists are getting . .. .. .. .. .slapped by them so the 8 strength rangers can kill you. Never mind that your cities have populations in the thirties instead of the teens and you have so much great people production you'd have to be an idiot not to have a high level altar and blessed promotion on your beastmasters and much of the rest of your army. Oops? Attacking ljosalfar with leaves late game is suicide, period. Find some other way to kill them, burn the forests down if you can manage it, but you're going to die if you move in anything an AV player of any side can bring to a fight even with a 5-1 city advantage.
Unit strength simply doesn't matter against AV summon hordes. It makes no difference whatsoever. When they fight, even at 100% chances there is still a chance that it takes damage. When it starts taking damage it will take more, and that will take the combat chance below 100%, and after that one of the summons will kill it. This is why you cannot plan strategies based on single unit, no matter how cool they are. The only exception being eater of dreams for the sheaim in an offencive war, where every city you conquer is another population -3 units at your disposal... Have you played with FoL? The strongest defence you have against summon spam is indeed the forests them selves, but not why you imagine it. It is because they use 2 movement points per squere. That means summoned units only move 2 squeres. This again is still bad news for those recons, since with a movement of 4, you can move 1, strike, and retreat 2. Still in range, I'm afraid... No matter how you put it, they are still toast as soon as they come. Also, even if you could get to attack the stack you are still going to run into the problem of not being able to target the summoning units, since stack has protection in the form of other units. Ideally lions and imps to protect from normal units and units with marksmanpromotion. If you don't have summoner trait, you might want to use something else instead.
Of course, then there's that fallacy of an argument saying AV can outproduce kilmorph with khazad.
Think about it, half the food requirements, 10% gold and science, -20% gp production and sacrificing, or +3 happiness, +40% production, +1 production to mines, +45% gp production and decreased support costs with gold rushing. You don't need to be a math major to get it. As long as they stay within their costs, AV can outresearch, but they are never going to outspend them.
Think about it this way. A citizen working on a farm can normally produce 4-6 foor, providing for himself and 1-2 other workers working production tiles or being specialist. A AV citizen produces the same amount providing food to himself and 3-5 other citizens working production tiles or being specialist.
The production bonus for kilmorph is as follows. Out of three population, at best, 1 working farms 2 working mines you get one extra production per mine + 40% flat rate.
For AV, you get at 3 to 4 times as many workers in production squares...
Not to mention you can put cities in places that would otherwise be stupid and take full advantage of every squere you have. So you have more cities...
You have a set amonut of good food production squares that limit the size of your city, lets say 4.
For AV this means you can grow and sustain the city to up to size 16-20, while others can sustain a city size 8-10, depending on resourses, sanitation, agriculture etc...
Which produces more?
(N+1)*1.4 or N*3
In what values of N is Kilmorph better?
Paladins, another really big duh here. Ok, so demon slaying wont kill sand lions and diseased corpses. Paladins are immune to disease and fear, killing 14 strength units with sand lions isn't exactly practical. Against paladins, diseased corpses don't cause disease, thus diseased corpses are useless. Using a -30% strength unit when it can't even the odds is pointless. Not to mention the 3 holy strength has it on a vulnerability too. Since you seem to think they can't do anything when there are only three of them, the crusaders are 7 strength, disease immune demon slayers too. Then there's valor increasing the xp gains and heal repairing damage between rounds on the faster healing units. Of course, that doesn't matter because the really weak summons from your ritualists are going to magically kill much stronger units with bonuses against them while the diseased corpses that can't disease anything win against yet again, better troops while having a further -30%.
Again, strength does not matter when summon hordes are in question. Back when nature mana still gave tigers, I ate a paladin defending a city with two tigers (honest mistake really, I had an tiger experience exchange going with my neighbour and I believed that it couldn't die to that. Boy how wrong I was...)
Paladins take damage from combat just like everyone else and once they have done that they no longer have 100% chance against low str units and bite the dust under the swarm...
Diseased corpses are meant to desease defence stacks that defend cities so that they are faster to take down and protect the stack as ablative armor... They are cheap and can be mass produced. Obviously if the enemy has destroy undead you use something else instead. They just come from a very early tech and are as such easy to use and pretty powerful.
What do you have against slavery anyway? It's by no means a weak civic, but then you go and call it the weakest religion civic? If you were ragging on social order sure, but even when you're not balseraphs, slaves are extremely useful to have. That grafting was great but hemah, which is available earlier than other archmages, comes too late to matter, that's just silly. They aren't the start of your dominance anyway. You get that from your disciple line. The drown with cannibalize upgraded into stygian guard destroy any and all naval powers, including the lanun. Never mind that the drown themselves are rather good at it to start with and lunatics are good for doing things like assassinating rosier. There's no nut too tough to crack with a lunatic early on, even with enraged being nerfed.
+1 production from quarry? Hurry with pop is ok, but still...
With no research bonus AV gets to arcane lore first and at the point where you have built Hemah AV player has already built his "summoner stack of doom" that is not too impressed with meteors... The "ditch defence" with tsunami works like a charm though. (that is building a channel of water 1 square wide cutting yourself of the continent and krakens keeping all invading navies at bay...) Yes, drowned and especially water walking stygian guard are nice. Will they rule the seas, no. They can't go out of coast or culture boundaries. Another favourite being underwater roads though...
Can anyone confirm or deny the grafted caster block?
Is AV good? Yes. Is AV some godawful cheese with no counters? Hardly, it's one of five different flavors of cheese called religions. Religions aren't even the only kinds of cheese, you're not bothering with rushing a religion as the hippus are you? If you are, stop and rush the ride of the nine kings. Being able to produce flanking 3 horselord cavalry with near perfect withdrawal is far better than having ritualists. You can kill them and their summons without a single casualty even if you have lousy odds, magnadine gets a 100% withdrawal rate too, godly that.
Also, when it comes to ffh, you're refuting god. From what I gather, daladinn can kill anyone with anything.
The problem at the moment with AV is, whatever others can do, they do better. With minor changes things could be different. Changing sand lions to str 1 (+4 fire) from 4+1 would mean resistances actually help against them. Also maybe moving the see invis to some other summon than the sand lion would make a difference. At the moment it is strong, moves fast and sees invisible. A bit imba, imho...
Hippus are nice
MV 7 commando horses ftw...
However, withdrawal only works when attacking... Mounted units are very nice for pillaging enemy heartlands, but are a bit expensive for it. Since if the enemy has any reserves, horses tend to be one use in that...
I have played, a lot, both single player games and against the most creative, smart and devious players imaginable... This has left me a bit disillusioned on how things really work in the game...