I read the description of OP at least 50 times, but I dun' get it.
The way the attack works is that a miner collusion
I assume you mean that you need more than one node for this?
attempts to artificially inflates the time span of each retarget section
And this "group" of miners does this how? Inflation means to increase, increase means it will take longer than 2 minutes to create a block. Not sure how you'd do it. It's possible due to less nodes?
When the collusion gains momentum theoretically for terracoin I think the difficulty will collapse and block spacing drops close to 0
And again, how do you prevent people from finding blocks? Bear with me, I am thinking as I type, so basically miners will increase the difficulty, then stop till the retarget code decides it needs to go down? And when it goes down it gets exploited by the miners with the most hashpower again?