Would Xykon become a demilich?

[acire]

I think a case could be made that there hasn't been enough time since the creation of the OOTSverse world for all that many people to become liches to start with, let alone for them to deteriorate into demi-liches the way it's described there.

In 3.5e, demiliches aren't deteriorated liches. They're "evolved" liches who have sacrificed most of their body (and a boatload of XP & money) to become more powerful.