So, from what I understand the story goes like this:
Kira (the Empire Goddess) throws you out of the "good" realm (symbolized by blue fog), and you land in the "evil" realm (symbolized by red fog). Why she does this I don't know, but she appears surprised enough when you later meet her again in C7; in the mission where you try to save Rhaskos and destroy the Aum.
In comes Mendechaus (the mentor) who wants to ease you in, something which, as he says "seemingly becomes easier each time". This could mean two things:
a) Mendechaus has been the mentor of other Underlords before
b) The player character repeatedly has served under Mendechaus
Mendechaus then explains (or claims to explain) the function of your home realm, and notes that you are so weak because your home realm has been shattered. Your journey into Kairos begins.
The first Underlord you meet is Marcus, who behaves very un-underlordy in that he seems to loathe violence and just wants his peace. When you kill him, Marcus warns you that your aggression will be the end of you.
The second Underlord we met is Rhaskos. He initially seems to be normal enough, but the presence of Empire forces and apparently Kira herself brings back old memories of his former self that is not like what he is now, or like the player Underlord. He also notes that the images do no promise him "the Aether, but something else", which is odd seeing how he supposedly is one of the aetherborn Underlords, and should automatically return there once the core in his home realm is shattered. This implies that Rhaskos was not always an Underlord, and could return to his former self (whatever that may be).
Then we met Mira, who promptly snoopes the Kenos away from under your nose. As you besiege her, she will taunt you saying that Mendechaus will betray and lead you astray, "as he has done to countless others". Of course, the chances are high that she's in fact lying, and might still do so when she pleads for mercy, claiming that the Kenos has "twisted her mind". Note down the latter quote.
Right after fetching the Kenos, we come to the perhaps most interesting mission, story-wise. While you fight against Kasita, Draven, and Korvek, they will have a little talk. Apparently, there were many "restless spirits all seeking a master before there were gods to give them direction". (Some of) these spirits, I do believe, would eventually become the Underlords, but we're not quite there yet.
So we get to Uther's Landing, and lookey here, Emperor Lucius has developed a bad case of megalomania and being batshit insane in general for absorbing the Aum. Which is interesting, given that the Aum is basically the Empire's version of the Kenos, and the latter drove Mira to madness in a surprisingly similar way. In any case, Lucius apparently doesn't mind that you slaughter his soldiers by the dozen and raze parts of his base - he even asks you to "remove he old" so he can rebuild his Empire according to his own vision atop of the ruins.
In any case, a few minutes later your minions are deeply busy punching the dear life out of Lucius, but the latter decides to be a killjoy and teleports to your realm. There he marches straight to your core, obliterating walls, traps, and just about anything else in his path. Just as he is about to make Chop Suey out of your Home Core, Mendechaus tunes in and cynically explains that Lucius is now his new pawn. In other words, the entire "War for the Overworld" only served to drive Lucius insane and make him easier to control for Mendechaus.
Lucius then presumably destroys your home core, and you are sent back to the Aether as expected. This time, however, you are suddenly greated with the blue fog or Kira instead of the red fog of Mendechaus, and the goddess greets you with the words "Welcome back, Overseer" - a term she may or may not have used right at the beginning of the game when her voice shouted "Now go, Overs- *inaudible*"
(contd.)
