I'm still not entirely clear how you want your gate burst mechanic to work. Or the aquatic movement/generation of R'lyeh gates. Do they make their adjacent locations permanently aquatic?
Are gates to Another Time and Another Dimension treated as copies of the R'lyeh gates (I hope so, for those of us playing with Lurker, it will cause more fear of random devourings)?
You'll need to be clearer about how you want the monster limit to function (because you're violating a core game rule, in quite a cool way I think, you'll need an alternative rules framework eplicating how you deal with monsters over the monster limit on the board once they move off the R'lyeh gate). If I understand what you want correctly, you want R'lyeh gates to continue generating monsters.
Oo, a potential effect, have it so that if no monsters are placed in Arkham during the mythos phase, all R'lyeh gates produce one monster.
I would cut the large text chunk "When Cthulhu awakens... defeat him." A few extra hits won't make that big a difference. You can just raise his combat modifier to -8 instead.
I probably also wouldn't bother with the text specifying that this can be used with other Cthulhu heralds (after all, it's not like there are official Cthulhu heralds anyway i.e. it's not a formal term). If you want to keep the suggestion though, you could just say that this herald can be used with one or more other heralds with cumulative effects. Players can just take it from there on their own initiative (i.e. they'd probably couple it with Cthulhu themed or aquatic themed stuff anyway).