so it sounds like our new rival is moving in the shadows to find or fabricate a legitimate reason to move on us via violence.
I see two main problems, the first being that we don't officially know this. we know, but he doesn't know we know.
the second, If he does find a legitimate reason to move against us our allies would technically be traitors if they move against him.
I think with the loss of the elder Denton our fellow vassal alliances have grown a little shakey. Denton being the one with the most authority. and with the count being new he hasn't had a chance to show himself as evil and or incapable which probably makes our friends less eager to take a side when the stakes are high.
I think we need to try get some advice from our uncle in law (in private), find out what exactly could be 'pretext' enough to move against us and how to arm ourselves against this less direct snake. also... give our uncle a heads up about some potential violence brewing in his duchy.
Lets shift our focus completely on getting our defences in order. maybe we could think up some traps or tactics to work against heavy cavalry. We should also try to find about what kind of forces our rival can bring... and perhaps who his close friends are that might aid him.
I think finding a bastard we could potentially support is a good idea, and we should go ahead with it.
About Luther, I think we should start opening up to him. He has proven himself able with the sword and willing to learn in areas where he is less able.
what we need in our squire is a comrade, a right hand man and perhaps even a confidant. a man who has our back not because its what he is trained to do, but because he genuinely cares.
I agree we should ask him to be our champion if the gauntlet is thrown down. I doubt it is proper to have him engage in the martial games on our behalf though. I'm not sure if he should participate in the martial games at all... it would be terrible if he were to get injured before we really need him to act as a champion... hmmm...
edit: to make it clear, I strongly agree with keeping to the doctors orders and avoid fighting or other heavy physical assertions.