Episode 3 of "The Haunted Palace" kicks off with Yeo-ri invoking a fervent prayer, seeking to locate Yoon Gap's wandering soul. Concurrently, the Crown Prince, now under the grasp of an evil spirit, regurgitates Yoon Gap, who promptly takes flight. The Blind Shaman, with a perception beyond the mundane, senses a disturbance in the air.In the early hours of the day, he discovers her absence only to be detained by Mrs. Yoon, who has thoughtfully prepared him a hearty breakfast. Their exchange quickly devolves into a spat, culminating in his attempted assault. They stand off, but Gangcheori's mystical prowess falters, leaving him to flee, jestingly claiming that Mrs. Yoon's culinary masterpiece has spared her from harm. To her delight, their squabble signifies quality time spent conversing with her beloved son.
At the royal workshop, Head Eunuch Kim entrusts Yeo-ri with the King's glasses, tasking her with repairing their handles. Upon glimpsing the ghostbane stone, Yeo-ri conceives a plan. She proposes an alliance with the Drowned Ghost, vowing to aid in her vendetta in exchange for crucial information.
Yeo-ri finds herself in a meadow where Prince Yeong-in, cruel and haughty, mocks her for disrupting his game. Seizing his moment of distraction, she conjures the Drowned Ghost from a jar of water. The vengeful spirit ensnares Yeong-in, leading him towards the very vessel from which she had once suffered her fatal plight. Haunting flashbacks reveal Yeong-in's brutal mistreatment of her, the cause of her self-imposed demise. After inflicting sufficient torment, Yeo-ri shatters the jar, liberating Yeong-in from his spectral tormentor. Yet, an ominous vision of his lifeless body haunts her vision.
Returning to the well where the Drowned Ghost holds her gratitude, Yeo-ri humbly requests that she cease her pursuit of Yeong-in, fearing for the ghost's karmic retribution. In return for her benevolence, the ghost reveals the location where the Crown Prince's laundry is attended to.
Meanwhile, Gangcheori's relentless search for Yeo-ri leads him into confrontations with the royal tailor and Head Eunuch Kim. When he at last locates her, she chastises him for overtaxing Yoon Gap's frail form. Despite her reprimand, she displays genuine concern, examining his ankle, which causes him to blush. He attempts to escort her home, but her summons of Head Eunuch Kim intercepts his intentions, swiftly whisking him away to the palace grounds.
Yeo-ri's mind flashes back to the Drowned Ghost's revelation: the towering 8-foot ghost lurks within the palace walls. Driven by urgency, she dashes towards the spectral presence and catches sight of the genuine Yoon Gap in a desperate sprint. Just as she's about to reach him, the menacing 8-foot ghost materializes, seizing Yoon Gap in its grasp. Yoon Gap's soul spots Yeo-ri, but Gangcheori intervenes before she can rush to his side. He elucidates that her prayer merely provided Yoon Gap with a fleeting moment of freedom; the 8-foot ghost's power is overwhelming.
At the Queen Mother's abode, the Blind Shaman imparts a grim prophecy: the 8-foot ghost will not vacate the premises until the Crown Prince meets his demise. The Queen Mother's visage betrays her turmoil, yet her loyalty is unmistakable—if safeguarding Prince Yeong-in from the ghost's wrath necessitates sacrificing the Crown Prince, she will reluctantly consent. Meanwhile, the Blind Shaman ponders what could have provoked the 8-foot ghost's earlier agitation.
Elsewhere, Yeo-ri realizes that Gangcheori harbors knowledge about the 8-foot ghost and reproaches him for concealing this vital information from her. He counters that Yoon Gap was privy to this dark secret and had attempted to manipulate her into expelling the spirit. Skeptical of his assertions, Yeo-ri turns a cold shoulder towards him. Mrs. Yoon, observing their interaction with amusement, mistakes it for a lover's spat.
To occupy her mind, Yeo-ri volunteers to wash Yoon Gap's deceased attire. Amidst the laundry, she discovers a bracelet, which triggers a vivid flashback. It takes her back to the day the Yoons prepared to depart for Hanyang. Yeo-ri bestowed her longevity cord bracelet upon Gap, and in return, he solemnly vowed to return for her. Presently, tears stream down her cheeks as she laments the bracelet's powerlessness to save him. Gangcheori, misunderstanding her grief, assumes she has resigned to Yoon Gap's fate and abandoned her quest to confront the ghost once more.
With suspicion cast upon War Minister Kwak, King Lee issued a command, compelling him to delve into the attack on Yoon Gap. Gangcheori's arrival was marked by a distractions of snacks scattered around him. Though he feigned ignorance of the incident, King Lee remained unyielding; the telltale stab wound spoke volumes of darker designs at play. Finding himself backed into a corner, Kwak reluctantly agreed to the task and hastily departed.
Left alone, Gangcheori's sole preoccupation was the array of culinary delights laid out before him, while King Lee dismissed his audacity with a shrug. As an impromptu test, the King solicited Gangcheori's opinion on the proposed abolition of slavery. Gangcheori found the notion hilariously absurd, asserting that it was inherent in human nature to indulge in vice. He branded the King's aspirations delusional and stormed off. Gangcheori further noted that the menacing 8-foot ghost predated the King's reign, raising the question why it had bypassed the monarch to possess his son.
Elsewhere, Head Eunuch Kim rails against Yoon Gap, branding him as mad. King Lee, however, discerned otherwise, pointing out that Yoon Gap's personality had undergone a complete transformation—an anomaly for someone suffering from amnesia.
A flashback unveils the genuine Yoon Gap witnessing the King's plans for slavery abolition. As an illegitimate offspring, Yoon Gap was deeply moved and vowed to dedicate himself to bringing the King's vision to life. In the present, King Lee instructed his entourage to keep a vigilant watch over Yoon Gap.
Meanwhile, the Blind Shaman unveils that the ominous 8-foot ghost is none other than the Warrior deity. Thirteen years prior, an entity of immense power had managed to subdue him, much like Yeo-ri's fleeting rescue of Yoon Gap's soul.
The scene shifts to Yeo-ri, who is contemplating Gangcheori's accusations that Yoon Gap had been exploiting her. Determined to rescue him and confront him about it, she dons the Crown Prince's attire and ventures into the woods, where she lures the menacing 8-foot ghost with cunning. To safeguard her, she wields the King's ghostbane stone lenses, an artifact of immense power.
Meanwhile, Gangcheori eavesdrops on Head Eunuch Kim, who is in a state ofpanic, realizing that Yeo-ri has stolen the lenses. Sensing an impending drama, Gangcheori decides to shadow her relentlessly, like an unyielding leech. Suddenly, the haunting sound of a bell pierces the air, drawing the attention of both Gangcheori and the Crown Prince, whoforcefully clears a path through the crowd and rushes towards its source.
The Crown Prince materializes before Yeo-ri, who pretends loyalty, claiming she wishes to serve him. However, he swiftly discerns her ulterior motive and attempts to strike her down. Gangcheori arrives on the scene, but so does the King, adding an unexpected twist. As Gangcheori threatens the Crown Prince, Yeo-ri engages in an intense ritual to banish the 8-foot ghost.
A guard, mistaking her intentions, launches an arrow at her, but Gangcheori intercepts it with his own body. At this crucial moment, the Blind Shaman senses a shift in the ethereal realm. The ghost abandons the Crown Prince, and the protective barrier around him collapses.
The final scene of The Haunted Palace Episode 3 leaves viewers on a cliffhanger as the ghost takes possession of the King, who charges fiercely towards Gangcheori, leaving their fates hanging in the balance.
