Here's what happened. Talana was a real Dragon Knight, the last one alive. After being mortally wounded by Rhode she meets you and with her last efforts grants you her dragon powers in a vision. In this vision she also shows you the forces of the true enemy: Damian.
Talana is now dead and Zandalor becomes your guide. From here on however, Ygerna sounds in your head, posing as Talana. No one knows she is playing you, you don't even know it because you have every reason to believe she is in fact Talana.
That is the deceit that is taking place. Ygerna seeks a saviour from within the afterworld and chose you because of the unprecedented events that take place. Only a Dragon Knight can survive in the Hall of Echoes, but she can't corrupt Talana. You on the other hand have no idea what's really going on and Ygerna makes use of this weakness.
The Divine explains this in more detail when you first meet him. Here's the complete text of what he says so you can have a closer look (if you're up for it
):
I’d bid you welcome, Dragon Knight, were this a place one would want to be welcomed to. Yet do not judge it too unfavourably off hand, for it is here you shall have to learn the meaning of eternity.
Poor creature. Ygerna has claimed another soul and Damian, my… my son, is stronger than ever. Yes, that is what I call him still despite everything.
No doubt you have guessed the truth by now: I am Lucian, the Divine. Quite alive, yet often wishing I was not as I dwell in this half-world, this cageless prison designed to keep me ever conscious and so suffer the torment of awareness. To be a wordless witness to the Damned One’s deeds.
Nonetheless, I have often shouted out in vain at one who unwittingly advanced Damian’s schemes by doing the bidding of his dark mistress. From the very Hall of Echoes she skimmed the surface of Rivellon for her knight in shining armour - who was to be both strong enough to find her, and weak enough to be controlled.
Then there you came: a formidable Slayer blessed with the power of the Dragon, but humbled by a mind exposed after a ritual incomplete. It was Ygerna who led you here, not Talana.
As she took on the guise of that courageous woman and showed you a vision of things to come, this sinister empress led you to believe the lie even my old friend Zandalor held to be true: Ygerna’s life is Damian’s death.
No, Dragon Knight, Ygerna’s life is Damian’s invincibility as I learned from my accursed son himself. They have been questing for the same outcome from within the Hall of Echoes and from without.
Ygerna was the first to triumph. You, her champion, ensured that victory against all odds: against her lover, even, who never realised you wanted to find her soul for resurrection, not destruction.
Now nothing is left for us, lost phantoms caught in their sinister webs, but to watch as they lay claim to Rivellon and obliterate all that the heroes of man have spilled so much blood to protect. We will watch as the Damned One and his queen wade to their victory through war's crimson rivers.Now, I should point out that even the Divine knows not all. He says - for instance - that now Damian and Ygerna are invincible. In Flames of Vengeance you prove this to be untrue. He also says it is Ygerna who was responsible for the vision, but that was probably Talana.
Some minor things remain a mystery.
