There are no factual flaws, certainly, but it's counter to the sense and spirit of Ishy start to finish. He knows each turning of the Wheel, each Rebirth, means greater flux, an opportunity for a novel ending: He's counting on it to release him from a vicious and never ending cycle. Unless something happens we've never seen him reference, Ishy serving the Creator as he says the Dragon has served the DO in Ages past (and if you think about it it almost makes sense, because if the Dragon is the DO's Champion whom is the Creator's, whom does he fight?) then oblivion must be nearly as appealing to him as it is to the DO. He must fail, fail, fail, always totally, always epically, and as long as he serves the DO the only alternative is victory--which means annihilation.

So I can't see any "hope for Salvation and Rebirth" for Ishy in the Wheel. He's an extremely tired man, even apart from having been in and out of consciousness for a generation every thousand years since the Breaking. At this point he probably hates existence as much as the DO does.