I find that to be a rash conclusion that should be the last resort for an explanation. Lugia and Ho-oh of the third generation happen to pertain to the same category as Mew, Celebi, Jirachi and Deoxys. From a storyline perspective, the Navel Rock event describes their history as of approximately three years prior to their appearance in Whirl Islands and Tin Tower, respectively. If you rule it out on account of continuity, you achieve nothing. It is Johto that is supposed to be "untouchable" in this period of time, rather than the 100 Pokémon associated with it.Quote:
Navel Rock, Ho-Oh/Lugia: In the game continuity, Red/blue doesn't visit Navel Rock, since the ticket to go there is obtained from an outside event, not an in-game event - it was simply to "catch 'em all".
Besides, Lugia and Ho-oh's appearance in Johto is influenced by Gold/Kris' having been entitled the Silver and Rainbow Wings. No one else has seen Ho-oh in contemporary Johto, though Lugia has been rumored to be seen on the night of a storm. It is likely that Navel Rock is Lugia's fixed location, where it has only been "disturbed" by Red/Leaf (and May/Brendan?). The holding of the Silver Wing by a deserving trainer triggers its return to Whirl Islands, the closest of its habitats to Brass Tower. As for Ho-oh, it is curious that it is lured to Navel Rock without any special item - is it there to protect Lugia?
There is, of course, the matter of Colosseum and XD. I believe the background attached to Lugia, Ho-oh and Celebi (nothing is said of the birds or beasts) in those games should not be dismissed. However, Game Freak will have to acknowledge the existence of the Orre storyline for us to be certain of the links. Sadly, the staff seldom express their opinions on anything but game sales.