In Which the Man of the Hill Concludes His History
Watson explains to the MotH (Man of the Hill) that he is financially ruined.
If he doesn't get a hundred pounds ASAP, he's going to kill himself.
The MotH offers to lend Watson the cash, as long as he doesn't gamble it away.
At that moment, Watson's medical assistant comes running in.
He announces that the Duke of Monmouth has invaded from the West.
(The Duke of Monmouth was the illegitimate son of King Charles II. He thought he had a better claim to the throne than his uncle, King James II and VII and invaded England from Holland with a few supporters, but he totally failed to get even close to London. He was beheaded as a traitor in 1685.)
So the MotH and Watson both decide to join the Duke of Monmouth as quickly as possible, so they can help to overthrow James II.
The MotH gets slightly injured in the Battle of Sedgemoor, where the Duke is finally defeated.
He and Watson escape the battlefield.
As the MotH is getting treatment for his injury, Watson goes off and betrays the MotH to the troops of James II and VII.
The soldiers drag him off to jail.
The only thing that saves the MotH's life is a false alarm that sends all of the King's soldiers running off.
The MotH escapes, but he feels truly paranoid now.