Backstage at Heaven on Earth, the stage manager is freaking out because Ivy's missing. She's all angel-ed up, in her dressing room, and high as a kite. And even though the stage manager sees her stumble past him, giggling hysterically on whatever cocktail of mood-altering substances she's ingested, he lets her go onstage. Don't shows usually have swings or understudies for just such an occasion as "Featured Player Gets Off Her Nut on Happy Pills"? Apparently not a Levitt-Houston show. Ivy proceeds to blow all her choreography before face-planting right in the middle of the stage. And who's there to witness it? Pasty nemesis Karen, who's showed up to return Ivy's sunglasses. Oh, if only Ivy would stumble into Norbert's dressing room and bludgeon Karen with his Tony.
Instead, Karen chases Ivy -- who's still in full angel drag -- out into the street, where they act out the continuing power imbalances of the workshop star vs. the chorus girl, and when Ivy accuses Karen of not trying hard enough to land the role, Karen jabs back that she refused to sleep with Derek for the role. "You weren't the first choice," she says, and you can tell she thinks she's landed a major blow. Ivy shrugs it off and says that her mother said worse than that, and of course used to beat her with xylophone bars until she could sing the entire score of Funny Girl, complete with comical Yiddishisms.
Tom puts on his most Republican-looking suit and shows up to John's buddy's fund-raiser, where he does like any good liberal and lunges for the hard liquor. It appears to be a gathering entirely of gay Republicans, because Lawyer John says their goal is not to be a minority in their own party, but to put forward candidates. And to that end, Lawyer John's former roommate is running for Congress! Everyone applauds conservatively. Tom approaches John to excuse himself, saying that he has to ride off to Ivy's rescue, and John sensibly points out that Tom is infantilizing Ivy by trying to save her all the time. Instead of giving in to reason and going home with John to have passionate, politically diverse sex, Tom proclaims to the room at large that he doesn't like Republicans, but he does like John, and then he makes his exit.
In Brooklyn, the borough of broken dreams, dreary Leo comes out onto the terrace, because of course the enormous brownstone also has a terrace, to tell Julia that Shrek has come home but he's packing and leaving because he found out Julia's a cheating liar (some more!). Julia begs Shrek to stay, but Shrek throws out his newfound knowledge of the affair "before" and then leaves with his bags. Julia makes her Edvard Munch face.