Clues to Xorn’s identity?
While it is now no longer the case, it is clear that when Grant Morrison wrote his “ultimate Magneto story,” he had every intention that Xorn was actually Magneto - and that the X-Men’s oldest foe would indeed be killed in the finale of the story. This section will go under the assumption that this pre-retcon is true, and point to all of the clues Morrison left that something just wasn’t quite right with the newest X-Man.
The first appearance of Xorn, ironically, is the most difficult to pin down as being reconcilable with his identity of being Magneto. Much later, Magneto claimed that the entire situation with Sublime and his U-Men being lured to China in order to “inspect” Xorn for harvesting was set up by his Chinese allies, of which presumably Ao Jun was a member. Further, the entire Feng Tu facility had been constructed by Magneto himself, and the façade of Xorn an invention of his own. The murder of the X-Corporation employee in 
Hong Kong was presumably also orchestrated by Magneto’s cabal, as it was the impetus for the X-Men to investigate, and ultimately learn of the Sublime and the U-Men’s fascination with the enigmatic Xorn. [New X-Men Annual 2001]
While this truly intricate, Machiavellian plot was definitely the most complicated scheme ever hatched by Magneto, it was not outside of his power of intellect. Nevertheless, when the U-Men began examining him, one of their number who had previously been a self-described “keen” amateur astronomer stated that, by the evidence of Xorn absorbing light, there could be a miniature micro-black hole in his skull. Later, when the X-Men arrived, the man reiterated that what they were seeing was consistent with the gravity force of a black hole.
It should be noted, however, that there are some instances of possible telepathic manipulation. Earlier, when Emma had attempted to telepathically learn about who the U-Men were searching via the key’s psychic imprint, she had thought that it might have taken hours. Instead, it was instantaneous. If someone or something had possessed the telepathic abilities to psychically imprint the faked memory, it is not out of the realm of possibility that much of what was presented to the X-Men as reality was not just cosmetic sets and props, but altered perceptions, tailored to their benefit. This would have definitely have been a feat, as Magneto could not have known that Emma Frost had recently joined the X-Men, and the telepathic hoax would have had to have fooled Jean Grey-Summers or Professor Xavier.
To summarize, here are the tools Magneto would have needed to have pulled off the illusion of Xorn:
- Chinese agents (including Ao Jun), prepared to perpetuate the façade
- Construction of the Feng Tu facility
- Ao Jun luring Sublime and the U-Men to Hong Kong
- Murdering the X-Corporation employee to lure the X-Men
- Having a telepath psychically imprint false memories for one of the X-Men’s telepaths to “find”
- All of this being done just weeks or months after the massacre at Genosha, at which time Magneto was already convalescing from the events of Eve of Destruction.
After this set of instances, events are much more easily understood. For the most part, Xorn did not use his powers and, when he did so, he used them in ambiguous ways. For instance, when he and Cyclops were being held on the Shi’ar superdestroyer by the Superguardians, Xorn had used his purported gravitational powers on the Guardsman named G-Type, who was composed of living solar plasma. Could G-Type have mistaken Xorn’s magnetic powers for gravimetric?Much more interesting is that, just after escaping from their bonds but before returning to the Institute, Xorn could “hear” the electromagnetic alarms of the dying superdestroyer. In retrospect, this ability does not seem to fall under the capacity of someone with a star for a brain. That being said, the powers of Xorn were deliberately kept unclear, possibly for just such a need by the writer.
Later, upon arriving to the Xavier Institute, Xorn used his powers to “heal” Jean. By his own words, however, he did not so much “heal” - as killed the nano-sentinels in her bloodstream. This ability would definitely be under the purview of Magneto, the Master of Magnetism.
Shortly thereafter, it seemed that Xorn had healed Xavier’s crushed spine. However, much later after his unmasking, it would be revealed that “Magneto” had not healed him, but used the nano-sentinels in his bloodstream to glue his spine together. Not healing - but magnetism. [New X-Men (1st series) #126, 146]
One of the more difficult issues to reconcile is New X-Men (1st series) #127. The entire issue is narrated by Xorn himself, via a journal he has written to Professor Xavier. However, if one goes under the assumption that Xorn is Magneto, then the whole journal is one, long letter of misdirection. [New X-Men (1st series) #127]
For the next several storylines, Xorn is basically absent. The next time he is seen, he has been assigned the “special class” of students at Xavier’s. Their first activity together is not in the classroom itself, but in the woods for a night of camping. Of course, they are blissfully unaware that the night will be interrupted by the U-Men, in their pursuit of harvesting mutants’ organs. After constructing their campsite and having gathered wood, Xorn uses an ability that should not be one of Magneto’s - starting the campfire from energy within his mask. However, in the age of the X-Men, with Cerebro and Shi’ar technology at the fingertips of the X-Men, such a feat is not incapable of being simulated. [New X-Men (1st series) #135]
The questions of Xorn’s powers, however, takes a backseat to the issue of actions. When it became clear that running away from the U-Men was no longer an option, Xorn informed the class that he would take care of the situation. Finding them in the forest, Xorn made short work of them, killing them all. While this might not seem unreasonable, given the circumstances, Xorn had always portrayed himself as being Buddhist, for whom violence is abhorrent. For a Buddhist to kill a small group of people would be out of character, it would be hardly so for the self-styled leader of Homo superior.
Not much later, at the end of the riot at the Xavier Institute, the leader of the riot, the young Quentin Quire, lay dying. Having been abusing the mutant steroid called “Kick,” Quentin’s brain cells were being converted to faster than light energy and disappearing. Asked to use his healing powers on Quire, Xorn refused, stating that the young man was
merely changing and it would be wrong to interfere. Instead, he opened his mask, emitting almost blinding light, with Quentin Quire expiring a moment later. This is interesting in that this demonstrated that Xorn evidently did not need to have his containment helmet on at all times to hold back his power. But how did Magneto generate the light? [New X-Men (1st series) #138]
Shortly after the riot, an apparent murder occurred, with Emma Frost’s diamond form being shattered into thousands of pieces by a specially designed diamond bullet. Later, Jean would be capable of using the power of the Phoenix to reassemble and, basically resurrect her. However, as the investigating X-Men, Bishop and Sage, closed in on the murderer, the culprit - in actuality one of the Stepford Cuckoos, Esme - made good her escape in a driverless taxi that she “telepathically called.” The force behind the driverless vehicle was Magneto, driving it magnetically. [New X-Men (1st series) #141]
Whatever the deception before, the unmasking occurred once Dust refused membership in Magneto’s new Brotherhood. 
Her capture in front of Xavier ended all pretense and, with the X-Men all gone on separate missions and Xavier caught off guard, Magneto and his new Brotherhood were easily able to capture the Professor and destroy the school. Likewise unopposed, they gained control of Manhattan, recruiting perhaps thousands of mutants to their cause. [New X-Men (1st series) #146]
During this time of reflection, as Magneto waited before the next phases of his plan, through conversations he had with members of his Brotherhood, Magneto reiterated that the guise of Xorn was merely an invention and that no such person had ever existed. This was something that he had to repeatedly tell Ernst, the seemingly less intelligent of the special class, who had trouble with abstract concepts like the dual identity of Xorn. [New X-Men (1st series) #147-148]
Also throughout this time, Magneto made multiple references to his past activities. His mentioning to Toad that, “We were all losers… once,” seems to reference Toad’s past life as Magneto’s “toady” during the first incarnation of the Brotherhood of Evil Mutants. Likewise, Magneto seemed intent on completing old plans, conceived by himself years previously, such as the reversal of the Earth’s magnetic poles.
However, it could be argued that, if one were acting as they perceived Magneto would act, they might be acting off of long outdated plans and schemes.