Several Decades ago when the Archmage Iggwilv brought the Marches of Perrunland under his domination, considerable store of treasure was taken from that place and sequestered by him somewhere in the no man’s land between the Duchy of Geoff and the forsaken Sea of Dust. Among his loot were several rare and prized tomes and the fabled lamp known as Daoud’s Wonderous Lanthorn.
When Iggwilv was slain by the Demon Graz’zt, and his minions scattered by an uprising of oppressed subjects, rumors began to spread regarding where the Archmage’s treasure trove was located. Considering the cartloads of precious metals and gems taken away during the overthrow, it is not surprising that most of these whispered suggestions were ignored as spurious. However, the books and the Lanthorn were never found, and the rumors did reach some interested parties, for several expeditions have sought to locate these items, but the parties were either unsuccessful in their attempts to find the location of the Caverns of Tsojconth (where the most reliable rumors claim the treasure rests) or else failed to return. (Original version, pg. 1)
Nearly a century ago the Arch-mage Iggwilv sent her evil minions to conquer the lands around her abode. So successful was she that the Marches of Perrenland were subjugated for a decade, and great indeed was the loot brought to Iggwilv's lair in answer to her insatiable demands for treasure. Legend states that the arch-mage gained much of her prowess from discovering the Lost Caverns of Tsojcanth, where in was hidden magic of unsurpassed might. It is certain that lggwilv ruled her domain from these caverns. There she also conducted arcane experiments and rituals, trying to further increase her powers.
These experiments were her downfall, for during one she accidentally freed the demon Graz'zt, whom she had imprisoned and forced into servitude. There was a terrible battle, and although the demon was forced to flee to the Abyss, lggwilv was so stricken from the contest that her powers and strength were forever lost. With the wane of her evil, lggwilv's realm was sundered. Her former henchmen and slaves stole her treasure and scattered to the four winds in the face of enemy armies. The arch-mage, however, used the last of her power to prepare a hiding place in the caverns for her remaining wealth. Legends say that this included several tomes of great power and the fabled lamp called Daoud's Wondrous Lanthorn. What else might be hidden no one knows, for no one has yet discovered Iggwilv's hoard.
That lggwilv is long dead and gone cannot be doubted. Until recently, though, the stories of her secret cache of treasure in the Lost Caverns of Tsojcanth were regarded as another grandfathers' tale to amuse the younglings. Cartloads of tapestries and rugs, statues and rare art objects have been recovered over the years as well as chests of precious metals, sacks of coin, and coffers filled with gems and jewelry. It was believed that all her treasure had been looted, and that no magic or wealth remained. However, recent investigations have indicated that the magical lanthorn did exist and that lggwilv possessed it. Iggwilv's lair was definitely located somewhere between the gorge of the Velverdyva River and the hills east of the town of Krestible. The realms of luz, Perrenland, and Ket have sent expeditions into the Yatil Mountains seeking the exact location of the caverns; the few that have survived have all failed. (sequel, pg. 2)
By contrast with the original, in the sequel Iggwilv is a woman who has bound Graz'zt to her will - something that isn't made clear by that original description - and is able to fight off the demon, but only at a considerable loss of her own magical prowess. That makes the sequel more powerful than her male counterpart.
There is also the notion that Iggwilv in the sequel is from Perrenland while the original appears to be a conqueror from outside that area. Where Iggwilv is from can have an impact on how the defenses are designed and what languages are used within the stronghold. It could also hold a key as to determining how the Caverns of Tsojconth are protected from prying eyes.
Another difference between the two version are the changes in spelling. In the original its Perrunland and Tsojconth; while in the sequel it's Perrenland and Tosjcanth. They're sutble differences between the various versions of the module but the tend to point us in the direction of an evolving world where Gary Gygax is continuously refining his understanding of the lands and Robert Kuntz is pushing back against the confines of a game that could easily become static without such efforts.
If you read the original you're going to be immediately struck by two notions: (1.) that's a big area of land to search for the Caverns; (2.) why did Gary change their location?
When you consider that the original description has the location of the caves somewhere between Geoff and the Sea of Dust you've got to imagine the ridiculous amount of land you're going to have to explore just to find the damned caves. And when you consider that it's mostly mountainous travel . . . you might as well plan on having epic level characters exploring a dungeon designed for sixth level. Don't get me wrong, I'm all for that sort of challenge as a Dungeon Master, but you're going to burn out your players.
So I think that the reason the location was changed from so a large expanse to a smaller area was so that there was a reasonable chance that the actual players might find the Caverns before they grew old and died.
Gygax, Gary The Lost Caverns of Tsojconth. MDG, USA: 1976. pg. 1
Gygax, Gary S4: The Lost Caverns of Tsjocanth. TSR Hobbies, Inc. USA: 1982. pg. 2