Nothing quite as scandalous as that. There's a dryad here with a bit of a dramatic liking for all things elven, and she... was rather forward, and persistent. She's quite hard to resist... and then she happened to involve Zevran and it all went horribly downhill from there.
She mostly acted as an adviser, ran the country a little when Alistair went off to see to other things. I'm pretty sure he made sure their bedrooms were very far apart, though - so, hers might've been in the dungeon, for all I know.