Dun, dun, dun! Secret revealed!
A note about the dragon:
everybody sees something different -- what they, individually, fear the most. Karadur's fear was seen as a dragon.
Kynan is actually what is known in medieval legend as a Cambion. "A cambion is usually devilishly cunning, and angelically beautiful, able to persuade even the most strong-hearted individual to do his or her bidding." (from wikipedia)
Plus, I tinkered a bit because of the whole demon-incubi thing. Cool, huh? We'll have some more fun with this in the future.
Remember, incubi/succubi are hated universally, though they're pretty much legendary now-a-days. Scary stories to keep children in line, or stories to be told around campfires, that sort of thing. Likely, Rell, Sybra, and Helena have no idea what they really are. Karadur and Alber (and probably Kimenia) know, though.
Let me know if you have any questions. Oh, and Andante, I figured the emotional explosion would tip Helena off the deep end again.
Though, if you don't like that, you can have her hiding in another room or something.