It's 127 years ago in Castle Morden and Coven's pretty sure this isn't how he looked back when he originally was in this tower. Rastus explains this is how Coven now remembers his past self, since the shock of the "curse" and the amount of time that has past warped his memories.
The man at tha balcony addresses Coven, as he appeared fresh from the 127 year old curse, and bestoys the advice that the only way to remove it is to perform good deeds.
Coven is understandably upset when he sees Deacon was the one who was bestowing the words of wisdom over a century ago. Rastus hypothesizes that Deacon did this for personal gain, but what could it have been...?