Leaving complicated schemes aside, it seems to me that Xykon and Redcloak could have just taken the city by themselves using a combination of direct spellpower and minionomancy without needing an army at all anyway. In the battle for Azure City, the two armies primarily fight each other even as various high-level characters rampage through them completely unimpeded - Belkar's case is the most obvious, but he's not alone. In terms of Xykon and Redcloak's actions, this really only has the benefit of scattering a handful of high-level characters - primarily the members of the Order, who outclass the entirety of Azure City's defenses aside from the Ghost Martyrs by themselves - but I'm not even sure that matters. The nature of the Ghost Martyr situation means that anyone else who tries to stop Xykon in the throne room just dies due to the symbol of insanity anyway.

So without an army, maybe Xykon and Redcloak need to spend a couple of days battering through the defenders using additional minions - even in the battle itself, Redcloak's various minions accomplish more than the hobgoblin horde - but unless Azure City had some high-level reinforcements available somewhere, it doesn't matter. This is 3.5e, high-level spellcasters trump everything.