I'm diaglo's DM, and I can say it definitely works ... especially if you make the clerics in the Caves of Chaos minions of the same church as ToEE (level wise, without modification, it links up better with RttToEE, though). I'm using the Keep from KoB as the base town instead of "Hommlet", but with some of the NPCs transposed. Note that if you read our story hour it isn't a direct transition -- there are a couple of original adventures, side treks, and a good bit of Forge of Fury (and a near-TPK) between KoB and the Moathouse.
Check out Milo Windby's story hour, too -- they did a direct Keep-ToEE campaign that seems to be very successful.