In other words, it's legal in much the same way that Mana Crypt and Sewers of Estark are legal despite not having been printed in an expansion set. Correct?

Don't forget me and Wise, Mister Campbell 

I am VERY certain I know the answers to these two questions, but I got in to a little debate on MWS about these and figured I may as well ask.

Elsewhere Flask 
Artifact
Rules Text (Oracle):    
When Elsewhere Flask comes into play, draw a card.
Sacrifice Elsewhere Flask: Choose a basic land type. Each land you control becomes that type until end of turn.

Wasteland
Land
Rules Text (Oracle):    
: Add 1 Mana to your mana pool.
, Sacrifice Wasteland: Destroy target nonbasic land.

Glacial Chasm
Land
Rules Text (Oracle):    
Cumulative upkeep-Pay 2 life. (At the beginning of your upkeep, put an age counter on this permanent, then sacrifice it unless you pay its upkeep cost for each age counter on it.)
When Glacial Chasm comes into play, sacrifice a land.
Creatures you control can't attack.
Prevent all damage that would be dealt to you.



Situation 1: Player A uses Wasteland's activated ability, in response player B uses Elsewhere Flask to make all his lands Mountains. Is the Wasteland's activated ability countered?

(My answer would be no, Elsewhere Flask does not make them basic lands, it just gives them a basic land type.)

Situation 2:Player B plays a Glacial Chasm then tries to sacrifice the Flask to keep the Chasm's C-I-P Ability from triggering. Does this work? Is there any way for any interaction of those 2 cards to keep Chasm's ability from triggering?

(My answer is no, Glacial Chasm comes in to play and the CIP ability is placed on the stack before anyone can turn the chasm in to a mountain/island etc. I do however believe that in a situation where a blood moon is in play, the CIP ability would never trigger since the land comes in to play as a mountain and the CIP ability triggers When and not AS Glacial Chasm comes in to play.)