Well, this thread has managed to get my minor creative juices flowing and has called me back from the Aether to rehash and rearrange one of my weird ideas.
Lets assume the Deciever was good all along, intially and so forth.
Now, lets add in the fact from the GURPs material that Connacht was last seen, prior to becoming Balor, heading off to find a way to break the Cycle once and for all.
If Myrdred was a lapdog of the Cait Bruig as Shiver claims, one could assume the wily little sod was planning ahead, or perhaps had been previously been given orders by Connacht. Orders to act evil and such, using his inborn abilities for lying and deception, to fool Balor into believing he could be counted on.
Now, as for The Head, given that the Heron guards are renowned for magics which extend life, one could assume he was really one of Connacht's men, as he claimed, and was initially charged with aiding the new armies of the light to defeat Balor. However, over time he was corrupted slightly such that the means, if not the mission, became dark.
This could potentially help to explain why exactly Balor beat the living crap out of Muirthemne so hard...to cause the Heron guard to become Journeymen and lend a more academic backing to the armies of the light...and better help them to break the cycle by defeating Balor/Connacht. Since there was no empire, they wouldn't stick around to defend it and get carved to pieces by the evil forces.
Soublighter/Damas was called to whisk away various items, and secret them away...presumably because Connacht forsaw they would be useful to the Light, indirectly. He also saw to the shattering of the Tain indirectly, perhaps forever destroying the Spider Cults rumored to have escaped into it.
One could also argue that Damas chose the Spine of the World as his final stand subconsciously so that he could be destroyed there and thus fullfill his Lord's wish of destroying the cycle once and for all.
To sum up the arguement in general: The reason the Light won when it was supposed to have lost, was because the Dark was acting as its own fifth column against the Leveller.
Great or Crap? You be the Judge.
Spook.