: "With the aid of an avatara named Myrdred, he
: imprisoned the ancient evil sorceror Bahl'al, the
: Watcher, in a prison of solid rock beneath the
: Cloudspine."
: Ah! So is this why The Deceiver and The Watcher hate each
: other??
Well, it's never explicitly stated like I did, but GURPS gives us two facts that lead us to believe this: The Watcher was imprisoned with the Confinement Dream, and The Deceiver is the only one known to have the Confinement Dream.
And if you're wondering, being released from the Confinement Dream requires one leave a part of one's body left behind in it, no matter what. So there's no contradiction between the Deceiver helping Balor release the Watcher, and the Watcher tearing his arm off to escape.