I've tried making rising lava with various Layer 2 movement generators, but I could never get them to work correctly. What I use to make rising lava is a Vertical Autoscroll generator created by Jimmy52905. However, for some reason, I can no longer find it in the Sprites section of SMWCentral. However, I have decided to upload the sprite to My Files.
You will need 2 files:
Vertical_Scroll.cfg
Vertical_Scroll.asm
After you have downloaded both files, you will have to create a Generator Sprite and insert it into your ROM using something like SpriteTool, but I think that most hackers nowadays prefer a more current tool to insert Sprites. You might have to find tutorials on how to use Sprite insertion tools.
Once you have the Generator ready to use, open your ROM and go to the level that you want to edit. Go to Change Properties in Header

and change SNES Registers and Level Modes to 08. This will make it a vertical level with Layer 2 interaction.
Go to Change Other Properties

and set the Layer 2 (BG) Scrolling Rate to some setting that includes V-Scroll: None. This will make it so that even if Layer 1 moves up or down, Layer 2 will not move.
Place level tiles in your Layer 1, place lava on Layer 2, and insert the Generator.
What you should have is a level that appears to be sinking into lava. However, it's possible that enemies won't interact properly with the lava. If you find this problem, insert the following ASM file into your ROM:
lava.asm
I hope this helps. Rising lava towers are tricky business.