Episode 4 of "The Haunted Palace" kicks off with a harrowing scene: an 8-foot tall specter seizes control of the King, its malevolent presence overtaking his very essence. Meanwhile, the Blind Shaman writhes in agony as Gangcheori unleashes bolts of lightning upon the possessed monarch. Yeo-ri, wielding a shamanic blade imbued with ancient power, joins the fray, and together they manage to banish the wraith into the ether. With the ghost vanquished, the heavens open up, drenching the landscape in a soothing rain. The King, now free from its clutches, stands in a state of disoriented shock, his memories fragmented and disjointed.
Yeo-ri and a wounded Gangcheori find themselves imprisoned, the latter dramatically thrashing in pain as she tends to an arrow wound that has pierced his flesh. When she inches closer, his heart pounds furiously within his chest, a sensation alien to him, for he believes humans possess only feeble hearts. He pushes her away abruptly, caught off guard by her proximity.
Turning back to the enigma of the ghost, Gangcheori is eager to flee the capital, now that Yeo-ri has become its target. Yet, she steadfastly refuses to retreat, her resolve unwavering as she vows to save Yoon Gap, the only person who has ever shown her kindness and compassion. The King bursts into the room, confronting Gangcheori with an air of confidence, insisting that he is not Yoon Gap. Fed up with the charade, Gangcheori unburdens his story of Kwak's betrayal and the menacing 8-foot ghost. Yeo-ri stands by his side, her word backed by the Queen and the King's own son. The supernatural revelations are overwhelming for the King, and Royal Guard Seo concurs that the King was not himself during the possession.
Granted their freedom, Yeo-ri and Gangcheori face a new challenge: Gangcheori requires water to fully heal his wounds. He immerses himself in a crystal-clear stream, and both are taken aback when Yeo-ri is caught staring at him, her gaze intense and unwavering. As they prepare to depart, she makes a sudden, startling proposition—to serve him until he ascends the throne. In return, she seeks his aid in destroying the ghost and rescuing Gap, acknowledging that together, they form an unstoppable team. However, Gangcheori is incensed, believing she has abandoned her principles. He vows never to serve a manipulative individual like Gap, his words a scathing rebuke to her shifting allegiances.
Three days hence, we witness the King meticulously overseeing Crown Prince Gwang's studies alongside Royal Tutor Kim, who happens to be the prince's esteemed great-grandfather. Meanwhile, the Queen Mother is astounded by the ghost's inexplicable disappearance. She confronts the Blind Shaman, who divulges the presence of a formidable entity lurking nearby. He proposes to summon the ghost once more, with the intent of eliminating Gwang. It transpires that the Queen Mother harbors a deep animosity towards the King and yearns for Yeong-in to ascend the throne. However, she balks at the notion of the ghost's resurgence and merely instructs the Blind Shaman to safeguard Yeong-in. This action irritates the Blind Shaman, who inadvertently permits the ghost to incinerate Yeong-in's attire intended for an anti-possession ritual.
Elsewhere, Yeo-ri and Gangcheori engage in their perpetual squabbling, with Yeo-ri attempting to lure him into accepting her proposal with the allure of candy and a lavish possession feast. Though nearly seduced by the sweet treat, Gangcheori demands a longevity cord bracelet as his price.
Simultaneously, a report surfaces accusing Yeo-ri of conducting a heretical ceremony. In a kingdom where shamanism is outlawed, the King is compelled to issue an arrest warrant for both Yeo-ri and Gangcheori. As for Yeo-ri, she finds herself in the company of the Drowned Ghost. Gangcheori, as usual, is discourteous to Mrs. Yoon, leading to another spat with Yeo-ri, who comes to the older lady's defense. She takes note of his mud-splattered shoes just as the guards descend upon them to make the arrest.
Yeo-ri vehemently protests her framing, but the King is offended by her exploitation of his leniency. She cautions him about the return of the eight-foot ghost, yet the law remains steadfast, and he banishes both her and Gangcheori. Worried, she urges Royal Guard Seo to keep the ghostbane stone glasses in close proximity to the King.
Gangcheori remains unperturbed, revealing himself as the one who presided over their exile ceremony. Meanwhile, Yeo-ri, undeterred by his calm demeanor, decides to seek the wisdom of Sage Ga-seop, who tends to Neop-deok’s mystical tools. Gangcheori, though vexed by her persistence, is reminded by Yeo-ri that she stands as the prime target of the malevolent spirit and desperately seeks weapons for her protection.
Elsewhere, Yeong-in is haunted by the memory of his near-fatal drowning. When Queen Mother discovers his misdeeds, she slaps him in disdain, mocking his inability to confront the repercussions. Driven by a desire to prove her wrong, Yeong-in savagely beats the father of Ok-im, the Drowned Ghost herself. She weeps helplessly, her powers bound by the confines of the land.
In the depths of the forest, Yeo-ri encounters a menacing tiger, but Gangcheori intervenes, banishing it with a flash of his lightning powers. As they set up camp, his complaints about the scarcity of provisions are soothed by Yeo-ri’s offering of candy. However, her thoughts are troubled, and she confronts Gangcheori, recalling how lightning often struck the village whenever she was alone. He responds with indifference, casually noting how he once warded off potential dangers lurking in her shadow.
Their conversation is abruptly cut short by the appearance of an elderly thief, who makes off with the candy. Gangcheori chases after him, only to be assailed by a monk. Distracted by the thief gleefully finishing the candy, Gangcheori is knocked unconscious by the monk. Upon regaining consciousness, he discovers that the monk is none other than Ga-seop, who was merely defending Sage Noh, the old thief. Ga-seop, revealed as Yeo-ri’s mentor, unveils that he has concealed Neop-deok’s tools atop the mountain peak.
As The Haunted Palace reaches its fourth episode’s climax, Yeong-in, drowned in sorrow and liquor, raves incoherently within the palace walls. Ok-im, her eyes burning with fury, dares not approach him, for he threatens to incinerate her family’s home should she retaliate. At this critical juncture, the Blind Shaman initiates a ritual, summoning the formidable 8-foot ghost. Ok-im vanished into the shadows as the towering specter chokeholds Yeong-in, threatening to extinguish his life force.
