Challenging questions... I'll try to offer some answers.
What is the nature of the magical contribution to the "pyramid scheme"?
Its far more than just Magic Points, as you can probably guess. Lay members of the EWF contribute very little, but active cult members are becoming part of a growing, abstract, draconic consciousness that only the upper echelons of the EWF can begin to comprehend. That comprehension has only been fully achieved by True Dragons, Inhuman Kings and Obduran the Flyer who has, himself, transfigured into a True Dragon. The Eternal Dragon Ring, which exists below Obduran but above the Wyrm Hand Triumphants, have separate understandings of the consciouness but are not part of its whole because they have not yet attained full enlightenment.
Are MPs/POW donated by lay members to the Draconic/Draconised Cult they belong to?
Sort of. However, MP/POW donations are not necessarily direct donations and more an unconscious contribution. The best way of representing this is to use the Pact rules from 'Guilds, Factions and Cults' which details POW dedications and establishes a relationship with the cult/god/object of veneration.
If so, where do the MPs go?
Into the abstract draconic consciouness - although access to the growing pool of this power is inaccessible to all but those who can understand the consciousness, as outlined above.
To the higher EWF ranks? In which case have the Wyrm's Hand Triumphant's and higher got access to said MPs?
The Triumphants haven't, but the Eternal Dragon Ring has, and it manifests in their ability to assume draconic form and the powers they have attained as a result of their partial enlightenment. I'd refer you to 'Dara Happa Stirs' and the description of Lorenkarten the Mile and Lord Great Burin as examples of how this power can be drawn upon. It really is above and beyond mortal human magic.
To the psychic and physical territory of the EWF?
The consciousness is way beyond this territory, which is essentially rooted in human terms and therefore undraconic. The draconic consciousness exists not on the Gods Plane either; it is part of the fabric of the universe and was created before even the gods came into existence. Best way to understand this is read the mythology chapter of the Dragonewt book, which gives a further insight but still, isn't, a complete description of what the EWF's created consciousness really is.
To some "central pool" on the Gods Plane?
No - see above!
Hope all these metaphysics help. But I would strongly recommend that you read 'Dara Happa Stirs' and 'Dragonewts' for a better understanding of what's at work here. Of course, when the EWF Bumper Book of Fun is written (and it won't be for a while yet), all will become clearer...
