Creative Challenge: Ghosts in the alley.

[Cyclops08]

Every November 12th, a gruesome scene is played out in a dark alley behind the Fearsome Fright tavern and Inn.

70 years ago, the Lady bartender was walking down this very alley, on a night just like this...and she met a mysterious man in black who killed her with a dagger. The murders continued until the man in black was also killed in the very alley. each year the ghosts of these two are forced to replay her final moments.

An Inn was built (The Fearsome Fright)with several floors of balconies to witness the spectral event.
1) Rumors persist that the murderer still haunts the alley way as mysterious daggers are thrown at people from time to time.
2) Last year something unusual happened. A paladin jumped from the balcony and struck (with a holy sword) the murderer down before he could kill the girl. The murder seemed to fade into the cobblestones. The Lady screamed and cried, "What have you done?" and then she too disappeared.

This year no one knows for sure what will happen. But the locals have all turned out to see. The PCs have room to themselves and a private balcony. All day they have been hearing Bards sing lurid ghost stories.

Now is the time of truth...What will happen?

[Lunali]

All the other ghosts that were hiding from the murderer come out to take nonspecific revenge.

[MaxWilson]

Now is the time of truth...What will happen?

Universe splits into multiple realities: living reality (where she was murdered) and ghost reality (where she was not and it was just a single traumatic memory in an otherwise happy life).

The ghost lady shows up pushing a ghost stroller with a ghost baby, laughing and chatting with her ghost husband Randolph, who in living reality is happily married to someone else. Knowing that she was his second choice humiliates and greatly disturbs his wife Lianne.

Shortly after that, a ghost reality of last year begins playing, with the ghost of the ghost of the murderer being attacked by a ghost paladin from nowhere. Only this time, resentful and jealous Lianne pushes the paladin from behind, tripping him and giving the murderer enough time to stop kill the original victim AND Liane before the ghost paladin can kill the ghost of the ghost murderer. Liane becomes a ghost and bewails her folly in intervening.

Clearly violence is not the answer here. It just leads to more ghosts. What approach will the PCs take instead?

[Witty Username]

The ghost of the lady has been put to final rest as her desire to survive the night has been fulfilled, however now the murderer will rise and not be put to rest until he can fulfill his need for murder.
Option 1 the ghost of one of his former victims will put him to rest until next year.
Option 2 a descendant of the murderers original killer, slain by him will but the murdererto final rest.
Option 3 the paladin that interpreted his previous rise is now marked for death, if the ghost can kill him they will sleep forever.