so upon answering readric his call for a duel and killing him a second time i noticed the "You have lost reputation with Gilded Vale", i'm sorry but what? this really doesn't make any sense knowing you gained reputation by killing him the first time. 

I've had this happen as well.  The reputation change doesn't even happen until I zone to the first floor of the keep either.  Very odd..

I was able to work around this by exiting the keep without entering the main floor (via the exit on the right of the upper floor that led straight to the basement, then out via the moat).