I am personally fond of what you've done here, incorporating one of the most iconic and beloved of creatures in fantasy rpg into a DCC patron.
I too think the journal entry makes good background, and is indeed slightly reminiscent of HP Lovecraft... One thing I am unclear of however is Alkivasha's role as patron. If he was a human, and became the mad thrall of the first eye, then shouldn't that unnamed aberration be the true patron? After all, I believe the core book states (implies maybe?) that humans, (i.e. PC's) never become patrons, I'm looking at you Van Der Danderclanden. In any case patrons are always supernatural entities, and occasionally lesser deities, minor enough to deign consortium with mortals.
Anyway, I think you did a really fine job, and placed a lot of thought in composing the various spells, patron taints, bond results etc. The only thing that remains for me is to insert an NPC of Alkivasha's into the scenario for one of the characters to encounter, and hopefully
, place themselves under the domination of the first eye...