Personally, I can't see Ephraim/Lyon as knowingly requited in canon. There's just too much saying otherwise there for me. But in an AU, what you pose sounds about right.

Also, re:Orson and Seth and Kyle - I don't think Kyle really has that issue. He's able to ditch for Frelia, or run off with Lute. He's not tied down by any sense of duty in the end. Seth, on the other hand, ends up in Renais no matter what, you know?