The site which I watched this drama before had a weird way of separating the episodes, I have realised that for some websites where I ended off on the last recap is actually only halfway through episode 2. I'm going to be watching from another site from now so this might get a bit confusing and I apologise for that. Also note I'm not literally translating or covering every single phrase. Apologies for the late post.
For the accident during the dance, the dancers all kneel to beg for the emperor's forgiveness. He heads off to rest and Zifu is sent to serve him to help him undress him and whatnot. She is shaky to help him get into his clothes, he tells her not to be scared. She replies with saying that she's just anxious of being in the presence of the emperor which is referred to as 'tian zi' - a son of the heavens. He questions her about what she sees to be a 'tian zi'. She says that a 'tian zi' has the heart for all those under the skies (i.e. his citizens), and should feel, understand and care for his people. He asks about the state of his country and whether she sees it to be prosperous and peaceful. She replies with those six characters that the citizens are poor and yet the government officials taunt them with gold nuggets. The emperor is fascinated at how she knows those six characters and comes upon the revelation that Zifu is the woman the prime minister referred to (remember the 苦饥寒逐金丸 phrase) and is in admiration of her.
Commoner girls who spend the night with the emperor almost never get to go the palace since all his other consorts are daughters of really powerful officials and it would cause significant political upheaval. So it wouldn't be common protocol to take Zifu with him to the palace. Zifu reveals a hint of disappointment when he doesn't give indication of taking her. But perhaps out of impulse, he later tells her to come with him. Princess Pingyyang is happy to know she now has a person in the palace and reveals to Zifu her hopes that she (Zifu) not forget the one who helped her get where she if she becomes someone powerful and high in ranks. Pingyang reminds her to be a good concubine and to take this seed she planted and help it flower.
Duan Hong is the official who will manage the travel arrangements for Zifu's entry to the palace. It's clear that Duan Hong likes Zifu, but she only sees him as a "brother", to quote her words. He says that though she's entering the palace to be a consort, as long as she doesn't mind, he'll always be her brother who will protect her. Zifu is grateful at his offer of friendship. She asks for a favour that he take care of her brother (who will also enter the palace to play a small government role but will obviously not be staying with her) as she has never been separated from him before and worries for him. (Little does she know that her brother would become such a prominent historical figure.)
The Emperor (Liu Che) and Zifu take the boat into the palace. Liu Che points out the landmarks to her: the place where he hunts, where he goes for his daily meetings with his officials. Zifu points out a building that is a beautiful pepper red and asks what it is. Liu Che replies that it is the Empress' (his wife's) chambers and is obviously dismayed and worried for Zifu as though he has the ability to appoint consorts, the Empress is the head of the harem and yields control over all his consorts and concubines. Zifu tells him not to worry because she will behave well and be understanding and obedient.
Zifu enters palace and meets the Empress (Jiao Er). Empress appears friendly and virtuous, she calls Zifu up closer to take a better look but her demeanor shatters and she slaps Zifu. Clearly jealous and angry at Zifu for seducing her husband, and being of lowly birth. Other consorts fuel her anger, by saying that they are all daughters of high ranking officials or royalty. Jiao Er is ready to slap Zifu again when Liu Che arrives.
He asks Jiao Er whether she had received his gift. She replies that she really liked it but had "accidentally" knocked it over. She asks whether he sent her the gift as a remember for his oath many years ago. This oath was '金屋藏娇‘ a common saying these days, its meaning now has changed a lot from its intended meaning. In this historical context, the phrase is a famous reference to the story that Liu Che in his youth had told his aunt (also Jiao Er's mother) that he would like to build a golden house to hide Jiao Er in (according to rumours this is hence why they got married). Nowadays meaning has evolved such that it means hiding a mistress, similiar to 'hiding a pretty woman'.
Jiao Er is annoyed that he loves another now, questioning whether he is blaming her for not having a child. He says that it is a common occurrence to bring more women to the harem and tells her to be encompassing and welcoming of the other consorts.
Jiao Er's mother, Grand Princess Guantao, arrives. and settles their dispute. But Guantao is really a sly, cunning woman -she reminds the emperor of the rules of the court that Zifu being a lowly woman would have to be under the Empress' control and learn the proper rules before being given a title. She also reminds Liu Che that the Grand Empress Dowager (his grandmother) and Empress Dowager (his mother) have heard of his actions and are angered by the news.
Liu Che meets with his mother, the Empress Dowager, who warns him not to harshen the relationship between the Empress and the Grand Princess (Guantao) since they were the ones who helped him to the throne back in the days. The Grand Princess is favoured Grand Empress Dowager, being her daughter and all, and we must not forget the the person who wields true power in the court is the Grand Empress Dowager who has supported two previous emperors in their reign and her grandson now the third. But Liu Che doesn't want to be a puppet emperor who has to listen to the commands of others. Liu Che's mother blames herself for not being able to help her son and being useless. Liu Che doesn't want to put his mother in a difficult position so he decides he will leave the palace and go investigate his kingdom under the name of the Marquess of Pingyang.
Liu Che lets Zifu know of his departure and is in admiration of her understanding.
Zifu is sent to serve Concubine Rui, a concubine to a previous emperor (Liu Che's grandfather). She approaches the shabby chambers and finds Concubine Rui asleep, upon awaking Rui starts to attack Zifu and appears out of her mind. Rui believes Zifu is there to harm her but Zifu tells her she has been sent there to learn palace rules. Another palace maid tells her Rui is a mad woman and is dangerous; no one wants to serve her. Zifu comes to the revelation that leaving the place will be difficult, serving Rui will be even more so but she dismisses this difficult task saying that in bitter times or sweet moments, she will be happy.
Rui appears to like and trust Zifu. She teaches her the rules and customs of the palace, the statuses of all the consort, the power of the Empress, how to walk and serve others. Rui has a headpiece that reveals a mysterious relationship between her and the Grand Empress Dowager. Rui had a bad flashback to when the Empress in her time forced her to drink medicine to make her miscarry her child. This is probably the root cause for her madness and why she stays in a hidden shabby palace chamber. Rui apologises for biting Zifu during her flashback. Rui tells Zifu her story: Rui was a maid to the Empress of the time and the Empress had assigned her to be a concubine of the Emperor. Rui had promised Empress that she wouldn't have kids but then she did fall pregnant and when such a thing happens Rui explains that its inevitable that you want to protect your child and a child would save her life and position in the palace. Rui compliments Zifu on being a great woman but tells her she must protect herself. She hopes Zifu will be luckier than her.
Meanwhile the Grand Princess and the Empress plot to harm Zifu. They had originally planned that sending Zifu to serve Rui would mean that Zifu would either be seriously injured by Rui from her madness or Zifu would hurt Rui and hence be in trouble. Neither happened so the Empress is annoyed that her plans aren't going as she had hoped. Grand Princess suggests new plot to kill Rui and frame Zifu. Her plan succeeds and the episode ends with Rui spitting out blood, hinting at poison.
