Huh? Impossible are you being sarcastic or what?
Anyway, Sephiroth555, that's pretty interesting thanks for giving us the fact

. But let's not forget the head hunter in ep1. If the head hunter talked to 'Midian' who is searching for Jeruh, like the hunter in ep1, and who Rhue's sword obviously came in to contact with. Maybe Rhue's sword absorbed his aura and Head Hunters are sensers.
But your theory makes much more sense. What if Gaius recosiders Rhue's existance on the way because he realises - he only became Rhue only about a month ago! And the Phantom Slasher appeared at the same time! Maybe Rhue's memory of Landorian is the SECOND horrific event of Landorin. [as mentioned in the wanderers guide book] This would explain why Lyrra thinks everyone died at Landorian - because they DID! I have a feeling this is the fact Fwacho said we missed. Also, everyone seems to say Rhue has no memory - but Lun makes it seem like an expression of speech. He probably put it in juuust enough for us to notice it!
But if Rhue was at Landorian only a month ago and has looped the way since, The Way would have to be very small indeed. Someone would have noticed by now that it goes in circles and very small ones at that, no matter how much the Guided tried to cover it up. Maybe Rhue was actually at Landorian, and then went backwards to where we find him? Or of course, a fact that people never seem to realise - you never actually take note of where Rhue is going. I'll assume our only lead that Rhue is going "forward" is what Traziun says about the back country of the way, and that the end is far away. Traziun could have been tricked by the Guided too maybe..
We never know, the place after the end The Way could represent where the current Pharaphalyn became his current 'self', - like when Midian became Rhue [possibly if this theory is true] Or when Rhue became the Phantom Slasher. Gaius might know about the newest event at Landorian because he seems to sense deaths. This theory could make a bit of sense, like why Gaius gets interested only when Rhue mentions that THIS is where he lost Serena THIS is where his pourpose on the way really started [and the fact that Rhue recognises the place...] What if this is the mark of which we reckognise the Pharaphalyn? Who said it had to surround the Pharaphalyn himself..?
Gaius would have to make some assumptions about Rhue for this theory, but he does seem to know Rhue from 'before' and he is a senser.. . Maybe the way he is trying to be peacefull about getting Rhue's sword isn't because it's a shadow sword. It's because he's the Pharaphalyn, and he happens to have turned in to a mass murderer - or maybe all Pharaphalyns do. Gaius does seem dedicated to justice in the game.. maybe he wants to stop Rhue here and now but he can't go "Hey Rhue, just let me kill you you're the Phantom Slasher." But Gaius seems to be very knowledgable about the way - nothing seems to suprise him. Is it that only one pharaphalyn CAN exist on the way at one time, or is it that there IS only one pharaphalyn on the way at one time?
If it is that there IS only one at one time, then according to the theory Gaius wouldn't have much reason to kill Rhue, because someone else would become the Pharaphalyn. Or maybe, not all Pharaphalyns go crazy and start mass murderering when they become it

. If Rhue really is the Pharaphalyn, then it would explain why Gaius doesn't whoop his ass here and now, if he thinks he is the Phantom Slasher - or knows..
Maybe Gaius just wants to save his own ass from teh phantom slashness. "Haha ive got your sword now u cant slash noob" that would be funny.

If Gaius really is the perfect blade of Kalmar, [he's never persued him as we all know] Then he would generally be the man for the job to lead the Guided to their own destruction - he might have been leading them to destroy Tetzel, and then pounce with the Lyn while they don't have a leader to organise them.
Gaius has always been obsessed with justice as it seems to me, and he is Kalamar's perfect blade. He wants to stop the Guided because they mislead people - and if we treat being a blood lyn and being a Guided as as relgions, then the Guided would have the false religion as far as im concerened. Has the pourpose came out and said with a disembodied voice "We see all" - like the blana sera [or whatever they are called] "The blood lyn always have a reason, the same reason, it's because the Blana Sera said so." As we see Kalmar behave, and the Blana Sera, they do seem obsessed with justice, a little too much. Over-zealous gods are what the Blana Sera appear to be.
Here's a thought - Kalmar had the shadow sword Ghost Horror as we all know, supposidly shadow swords where made by the lord of the pits. And Kalmar seems to be the pontif of the blood lyn. But like Tetzel, he probably isn't the pourpose[in tetzels case]/Blana Sera himself. What if the Blana Sera are one entity - the lord of the pits. This would explain why the lord of the pits helped Sacrifa, because he had turned to not the good diety [ in this theory the pourpose ] and plus - they killed his wife. He wants justice. We know the Blana Sera make house calls to lyn camps, and he also was too eager to answer Sacrifa. The pourpose seems to be believed in by many more people, maybe because they are pure of heart, and don't believe that everyone must die for one sin - like the pourpose itself believes.
The pourpose never actually reveals itself to anyone, but the Blana Sera do, well not really, but they do talk to people. It would be pretty cool if, in the end the good diety appears just once.. just once and destroys the bad. Heh, kinda like in the exorcist 3.
Just some thoughts, im not claiming them as facts. Damn I like to get off topic don't I, sorry but I thik the blana = lord of pits was a pretty good new theory [ thats if it is new ^^;]
EDIT: I forgot to mention how much these theories conflict. In the theory that blanas = LOTP, then maybe Gaius in his seemly all-knowingness knows this, and wants the shadow sword because he serves the LOTP. OR, Gaius could be so smart and powerful he has fooled the evil diety and he is double double double double double double double double double crossing them.. or something. If so man, he's cunning. I wouldn't put it past Gaius though. What if he is the pourpose? That could make sense

Then the lord of the pits might think he wants to destroy the Guided, and thus let evil reign or the lord of the pits believes that he tricking Gaius in to persuing some form of justice. But, get the straight jacket and call the shrink because I really am now convinced Gaius could be the pourpse :O. He does know all.. He does seem to help people.. But what about the "person we killed"..
Damn, I don't want to find out now.. what if Gaius is evil

he was always so cool..