I mean, it's possible that there have been Echo blessed individuals amongst the Dotharl, who vividly recalled their supposed prior memories and past existences, who convinced their not-so-gifted kin that this was common to all Dotharl. It might not even be that they are reborn - just that they can pick up on memories or visions of others and misinterpreted this as being a form of past life. I could see that making sense and being the origin of how they came to believe in reincarnation.
As to the House of Crooked Coin, let's suppose it is an Allagan facility - well, it might have all sorts of interesting properties in that case.
