...the best way to do this is to wish that everyone down there undergoes a twisted transformation into whatever it is that was the object of the last thought they have by the time I finish this wish."
Sarah didn't fully realise the extent of the wish she'd made. The stone twisted her words so that everyone 'down there' implied everyone 'down there on the ground'.
And so everyone within the wishing rock's range, who was at ground level or below, was also affected by her wish.....