After a brief interlude of Theon yelling at Little Boy Blue, Luwin kindly suggests that Theon flee Winterfell. Yep, he should run. There are 500 Northmen outside and he only has 20 men. Theon doesn't think there's anywhere to go, though. He can't go home again with the shame of being the Greyjoy who ran. Luwin tells him that he doesn't need to go home. He can go join the Night's Watch. Once you go black, you never go back. No one can bother him there, and he can seize the opportunity to make amends for what he's done.
Theon listens quietly, but instead of heeding Luwin's words, he waits until daybreak and rallies his troop of 20. He wants them to break the siege or die trying. And whoever kills the hornblower gets extra laurels. [Note: It's actually one of the few moments where you don't want to punch Theon in the throat because a) it's a pretty damn good speech and b) it shows he's actually willing to be a brave warrior for once. It even momentarily looks like he's inspired his troops to die for the cause.] Instead the men clobber him, put a bag on his head and prepare to go home. They've made some deal with the people outside the walls of Winterfell, apparently. Luwin rushes out to demand answers. The Iron-born brute skewers the old man on spear and leaves him to die. What a dick.
Back at King's Landing, Varys breaks some bad news to Tyrion: Cersei was behind the attack that nearly cost him his life. If it wasn't for his squire Podrick's bravery, he would surely be dead. Tyrion doesn't believe him and thinks Varys is just trying to make strife, but then Tyrion checked @Varys on Twitter and saw, "SMH found out that C totes h8s her bro. Now T is all FML, amirite?" and now Tyrion believes him. After all, back in the olden days, if was on Twitter it was always true. Now not so much, SMH. Although Varys was definitely the Gossip Girl of Westeros. I wonder if there is Varys-Gossip Girl fan fic out there? Too lazy to Google. Now that Varys has Tyrion's attention he tells him that Braun has been relieved of his duties as the head of the King's Guard and that the hill tribesmen have been paid off and fled the city. Tyrion is very much alone. Also, Varys won't be coming around much anymore. Much like in middle school, unpopularity is contagious in King's Landing and Tyrion totally has the cheese touch. (Mandatory LOL for all Diary of a Wimpy Kid references!) Then Tyrion really does shake his head and tuts that he thought he and Varys were friends. Varys assures him that they are. He tells Podrick to open the door and Shae comes in to tend to her wounded lion.