Based on some of what's read in his papers at the end in reference to 'The Ultimate Game', its possible he was convinced he was living in a game and wanted to exit it, but that's just a theory.
How did Russell lose in the Realms of Gold 2 tournament finals? He didn't see it happen, and the others seemed to disavow responsibility for the event.
I thought one of Simon's characters killed his king by surprise with the Mournblade. Russell was worried about armies invading his land, not random characters with nigh-invincible weapons so he was caught off guard.
That is correct. What Simon did was so unexpected no one thought to look for it.
What caused Simon and Darren's fight at the camp? Was it because of the concerns about pirating games? And if he was kicked out of camp and ended up with federal charges being brought against him, how did he make it back for the tournament?
I believe that the cause of the fight wasn't over the pirating charges per se, but over the fact that Darren wanted to shift all the blame to Lisa. It was at least strongly hinted that Simon was very fond of her, and seeing Darren do that must have shattered Simon's image of Darren.
I thought the fight was over the virus released on the camp's network. Darren wrote and released it but made it look like Simon did which cost him his scholarship. It would explain the shoddy work uncharacteristic of Simon's programs.
Why didn't either Black Arts or the company that bought them make a big deal out of Russell being the lead designer of Realms of Gold 7? Being able to say they brought back one of the original designers of the first two games in the series could have been a huge marketing coup, regardless of how little he'd been involved with games in the time since then. Instead even most of the employees at Black Arts itself seemed to have little or no idea of his links to the origins of the company.
I think it WAS because of the fact he had no experience designing games or even worked in the games industry before. Even if he did help on the original, his utter lack of professional experience would probably have been called into question.