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The best part? This deck actually works. What happens is, once you hit layer 9, your opponent doesn't have enough cards in their deck to draw their initial 7, and they lose turn 0. Then you go back up to layer 8, and they lose 10 health. After 5 castings of Shahrazad in layer 8 (which should take 5 turns tops), they hit 0 health, and you move up to layer 7. Lather, rinse, repeat, until you make it back up to layer 1 and finish the resolution of that final Shahrazad.
The only flaw with this brilliance would be the "halving his/her life points, rounded down" because you would never be able to drop opponent's life below 1...no matter how many subgames they should lose. Half of 1 rounded down will always be zero.
From the Oracle text: "Players play a MAGIC subgame, using their libraries as their decks. Each player who doesn't win the subgame loses half his or her life, rounded up"
The original wording of the card set your life to "half of 1, rounded down", which is 0. They changed it to read "Loses half rounded up" in Oracle because the original wording was somewhat confusing.
The deck works fine. Or am I misreading what you said?
This wouldn't work... What if someone had training, from the military to counter your Shahrazad and spawn imaginary armies-orsomething.
AND even without doing that! You still couldn't control Leo's mind. His mental creations of his dead wife would manifest themselves in the layers and bone you over at every turn-forsomereason.
Oh, and for those concerned with drawing only Shahrazad s or Mox Opal s (just that one guy), you can still mulligan. Hell, you can mulligan all the way down to 3 cards and still draw the combo. The odds of needing to do that are ridiculously slim, though. And yes, it is true, even if somebody pulled off a hulk-flash and owned your face, it would only matter if you were in the first layer. Otherwise you would just lose that subgame, start a new one, and continue on your way. Also, having a spell countered wouldn't really hurt so much if you had 99 more copies of it to cast.
This is all hypothetical, of course...