So... are they going ahead with the plan to send Myrcella off to the Martells? That's interesting, because it implies that Tyrion would have been okay with any of his three plans happening. Whichever one got leaked to Cersei was the one he was going to stick with.
Okay. Pycelle is in bed with a naked lady. Tyrion barges in and explains that Cersei somehow found out. Pycelle blames Varys, who has ears everywhere. Tyrion doesn't explain the part about how each person had a different thing they could have told Cersei about. Although I guess Varys could have found out about a plan he wasn't actually told about, then decided to leak Pycelle's to trap him. Pycelle tells his goons to cut off Pycelle's manhood and feed it to the goats. Oh! It's... that one guy! The barbarian from the hills! Shagga! It's Shagga! Shagga complains that there are no goats, so Tyrion tells him to make do. I don't think he cares what specific animal eats Pycelle's manhood.
Pycelle protests that he's not a spy for Cersei. Technically, he serves all of House Lannister. He's always been Tywin's man since the days of the Mad King. This does not mollify Tyrion, so he has Bronn cut off Pycelle's beard. As a side note, Pycelle denies poisoning Arryn. But he didn't save him either. Pycelle's basic defense is, "I always served Lannister." Tyrion tells Shagga and Bronn, "Throw him in one of the black cells." They drag him out. Tyrion gives the naked lady (did you forget about the naked lady?) a coin. "For your trouble." Then another one, with a nod.
Tyrion sits with Varys. We learn that Varys put Shae in Sansa's service. He asks Tyrion if, with Janos and Pycelle gone, should he be worried? Tyrion says previous small councils served Hands poorly. He's kind of cleaning house around here, isn't he? Varys has an elaborate riddle about a sellsword and three great men. You know, "There's a rich man, a holy man, a professional jazz guitarist, and a sellsword in a room. Each of the other three wants the sellsword to kill the other two. Who's got the power?" Tyrion says it's the sellsword: "He has a sword, the power of life and death." Varys questions where power really lies, because in the real world, all the power lies with royalty or jazz guitarists. Varys asks who was truly responsible for Ned dying. Joffrey? The executioner? Varys thinks power is a shadow. He works that around to a compliment: "A very small man can cast a very large shadow."