You are applying real world physics to a universe in which magic exists. It is pointless to do so, and it does not in any way strengthen your argument. I.e. invisible creatures in D&D are not invisible creatures from H.G. Wells: their eyes do not need to be visible.
Yes. It also doesn't say that Zeus came back from the dead and danced a jig to entertain the public while MitD was on display. It also doesn't say any other number of things. What it does say is that he stood there, was gawked at (which requires people to see him) and that worked as a circus act. No mention of paint or smoke or anything that helped people see him - just an empty stage, illuminated. No mention of actions, no evidence at all to support any of your hypothesis. Literally, all you have is a circular argument: you believe MitD is invisible, therefore the circus act required some unseen, unexplained, unreferenced extra to make him visible, therefore MitD is invisible.
No, he is not drawn because he is surrounded by darkeness that stops us from seeing him. This is the basic nature of MitD's existance, the original joke that Rich had to run with when he created MitD. He has told us as much.
[citation needed] I am unconvinced by your statement of fact. Xykon can and often is serious. Nothing in the "this is how you must act when the heroes are here" suggests he is playing a joke, and his disappointment at MitD does not in any way suggests he was doing this for giggles.
"Some may be mistaken about having seen him"? Seriously? That's your argument? They saw the back of the cage and they thought they had seen MitD? You are seriously scrapping the bottom of the barrel. In any case, like with your circus assertions, you have no evidence that anything of the sort is going on. You are depending exclusively on circular logic to maintain the argument: MitD is invisible, therefore they must have a means to see him, therefore he is invisible. I reject this argument, like I reject your circus argument. You have no evidence, at all, for your position.
Errr... I think it makes good enough sense. They set up a trap for, say, a tiger. They got MitD instead. They approach carefully, and notice MitD is not escaping. They have a conversation, and still MitD is not escaping. At that point, it is clear he won't (what with his polite requests to be left out rather than smashing his way out). Therefore they might as well run with it and make a profit. Sure, they risk he might change his mind and escape, but it's a risk worth taking, for the money they will get.
Grey Wolf