As an active member of LCO, I'll try to explain what happen during the first war.
First, there was a bugged battle on Shariz where LCO and VE( not sure about there side since i wasnt there) had almost no gear to spawn with. Shinock made an agreement with VE to let them win and gave us the city back after, which they did, and it is all in there honor.
During an attack on Caraf Castle, Arowaine tried to kick one of our own player for leaching, which result ( I dont know how) in a press the retreat button which made us lose the castle.
VE laugh at us and kept the castle.
Where does that left us now, VE gave us back our city for a Strategus bug, but not for a mistake made from bad coding and mechanic.
I think the bad night time setting is closer to what happen to Caraf Castle, and i dont think 4-5 merc on your side would have made a lot of difference in this morning battle.
I haven't talk to Arowaine today so i dont know where he stands, but i think we should come to an agreement to settle this mess so we could still have many fight during the christmas vacation.
P.S We still hate you for raping our women and killing us by the thousand half a year ago