I discovered during the Dark Brotherhood questline that all Penitus Oculatus agents are Balthier. At this point, I punched myself in the face for my terrible actions and choosing to support the Stormcloaks. Fortunately, I was still on the Jagged Crown quest, so I immediately betrayed the rebels for the sake of a Sky Pirate.

I don't think I could live with myself if I went against the Empire now... well, except for when I do my Ba'Gamnan playthrough. Argonian two handed expert, methinks.