What I find interesting is that while Iwao anticipated the CYM coming for him, he was actually surprised to see Zhao's son be the man tasked with killing him.
I also find it odd that Iwao didn't rebuke Lan Di's claims that he killed his father in Meng Cun. This, however, could be for a number of reasons. One reason is that we wouldn't have any mystery surrounding Zhao's death but another possible reason (without Iwao outright killing Zhao) could be that Iwao was a witness to Zhao's death and felt some responsibility for it. Maybe Zhao created an opportunity for Iwao to escape the CYM (at the expense of giving up his own life) so the mirrors couldn't fall into their hands.
I personally would like Iwao to be Zhao's killer. The idea of a big bad pulling all the strings, making Lan Di their puppet, is cliché. The possibility of another cliché ending (Ryo ending the cycle of hatred by refusing to kill Lan Di) is doubtful because Shenhua's poem seems to strongly hint that Ryo gets his revenge.