Zuko had just had a moment filled with sense. Of course Joo Dee had poisoned him. Neither his Father nor anyone attending him would have known about it, and the creepy smile woman could have gone back to the Avatar to report what had happened. The Avatar would then challenge him to a fight, kill him, and make it look as if he'd bested another one of the Fire Nation royalty, that he was unstoppable. Zuko gritted his teeth in anger at how much it made sense, how well it fit. If the Avatar truly was trying to rule by fear, it would be the perfect ploy. Destroy the last son of the Fire Lord, and end the dynasty that had ruled the Fire Nation for hundreds of years.
And then Katara took that moment full of sense and totally just threw it right out the window in a hurry. It started off with the fact that she told him that his father was in prison. Zuko stared at her as if she was completely insane. Even if somehow they managed to get Ozai inside of a prison somewhere, there is no way that it would hold him. Zuko's father was the most powerful firebender that he knew... Zuko couldn't imagine a prison that could withstand some of the explosive power that his father could generate, when it so pleased him. "No, he's not..." Zuko said, staring at Katara. A part of him was wondering if this was some sort of ploy to get information out of him. But his father had made it sound as if he were still well known as the fire lord. "I saw him when I woke up... I saw him wearing the rhobes of the Fire Lord..." Zuko said. He'd even had the hair piece that went along with the title...
Then came the biggest, and most ridiculous bombshell. "I'm... what?" Zuko asked, his eyes almost crossing as Katara told him that he, of all people, was the Fire Lord. A part of him almost wanted to laugh, it sounded so funny. It was like a child trying to lie about stealing a cookie from the cookie jar, and blaming it on a monster that lived in the closet. "I was banished, Katara... my birthright was stripped of me... even if... even if something had happened to my father, which it didn't... my sister would be next in line for the throne until I restored my honor..." he said simply. He didn't point out the fact that his Uncle would likely have also succeeded the throne before him, had Iroh been alive.
He caught the glitter in her eye as he mentioned the lake, and worried that he'd said too much about his Father's location. Surely she must have recognized where he was talking about... but then she threw out something even more ludicrous than her last two statements. His father, had brainwashed him. Why in Sozin's name would his father do anything as silly as that? For as long as he could remember he'd been trying to get his father's love, his father's attention, his father's acceptance... why would his father need to brainwash him into it when he more than likely would have done whatever his father had asked, just to see his father smile at him and tell him that he was proud of him? "You... can't be serious..." Zuko said... there was no way that this could get any more insane, and yet Katara seemed as if all of this was... perfectly normal.
And then she drove the dagger home. His Uncle was alive? She would see the hope in his features, the twisting of his face so much that a part of him wanted to cling to what she was saying, no matter how insane it sounded, no matter what she said next. In fact he was too dumb founded to even the process the fact that she mentioned her Uncle saving the moon spirit for a moment or two afterwards. He shook his head, and stumbled back a step. His head was spinning and it felt as if the room was starting to take on a pulse of it's own, like the walls were throbbing in and out. It was all in his head, but for a moment Zuko really thought as if he was going to pass out. Sweat began to bead at his forehead, but he shook his head fiercely.