So I am working on converting OotA into my homebrew world.  My plan, overall, for the City of Spiders is that the city was sent to the Underdark as punishment to Corelion who brought too many elves to a new world.  It happened three hundred years ago.  And quite a few of the original elves of the city remain.  The name will not be the same as presented in the module.  I am not sure if I can say it here.  Snagged the name from a popular comic series/movie series/ancient religion. Each god(ess) who created their own people/ had people they favored/favored the god.  My homebrew world is relatively young.  The people were mutated during the transfer to the Underdark, creating the drow in the process.  They have come to hate the surface elves for retaining their place under the sun.  So much that they have secretly been forming alliances with their counterparts enemies.  I know this is limited information.  But what do you guys think?

As things currently stand, your homebrew relatively follows the D&D lore, and thus is accessible for both new players and ones already familiar with the lore itself. There might be differences in the minutia, but the general story is the same--elves cast into the Underdark become drow, where they begin to worship Lolth (I presume yours will also, given the spider motif your city has) and their jealousy of the surface world turns to hatred. 

Here is the main issue I have--it is unclear how long your drow have been in the Underdark.  From your post, it is not clear how long ago the exile occurred.  Here are a few questions you should ask yourself, since it will be important in making the transformation from elves to traditional drow a bit more believable: 

Are the drow currently living in the City of Spiders the same elves that lived in the city when it was cast into the Underdark?  Or is this the children of that first generation?  Grandchildren?  How many generations have passed?  Is anyone still alive from that initial exile, or anyone who knew someone who underwent the exile?  Or is the word-of-mouth story much, much more distant?

I can flesh out more of what I mean if you wish to provide answers--but the general gist of what I would say is this:  You have the elves physiologically become drow when they are exiled into the Underdark, but that is not necessarily a compelling justification for their becoming psychologically like drow.  Magic might make one's body change drastically, but the mind and soul tend to be a bit harder to corrupt.  Depending on how long the city has been in the Underdark, it might be at a different stage in the corruption process, and that is something that you will have to consider if you want it to feel believable.  

Good point.  Going to edit it.  Thanks.