Is this question about the Prime Deities or the gods in general?

Here's what I think: the good gods are good, the neutral gods are neutral (but more inclined to fight on the side of the good gods against the evil ones), and the evil gods are evil.

Predathos eating the gods would, on net, be a terrible thing for Exandria, even if Ludinus were removed from the equation. There was probably a good reason the Primordials cooperated with the gods in sealing away Predathos during the Founding, and I lean towards the prediction that before the end of the campaign, the gods and the Primordials will strike a bargain to re-banish Predathos. Team Issylra could have started the process of bringing the two sides together if they'd listened to Vasselheim's side of the story in Hearthdell, but instead, partly under Bor'Dor's influence, they deepened the wedge between the two sides and badly damaged their own standing with Vasselheim.

I don't know if you've had a chance to watch the latest 4-Sided Dive, but it was a little startling to me to hear Taliesin's takeaway on the situation in Hearthdell, which didn't jibe with my memories of what was actually said about the actions of the Dawnfather's followers there. I think it's really realistic in terms of people (all people, not excluding myself here) tending to form an opinion based on the first story they hear, when there may be more to the story, more nuance, more grayscale, or a whole other side. Unfortunately the party acted without hearing the other side, but in their defense it felt like Matt was kind of pushing them in that direction, and after the fact has done very little to suggest they read the situation wrong.

Matt also said in the same 4-Sided Dive, "Each campaign has multiple different themes, but this one definitely is faith and what that means in a very relative sense. Faith can be so many things and it can mean so many different things to different people. I like exploring gods and religion, both in the positive and the not so positive light, as just like in our real world, there's plenty of both, and I think based on the themes of Ludinus, the Ruby Vanguard, the pantheon, what we built over these years in Exandria, I think it's a wonderful place to explore what often in fantasy settings is just a given. There are gods, and they exist, and they're powerful, and they're mysterious, and then you focus on the small world. This campaign, I'm definitely interested in going, but what if small world could destroy the gods? And how would they react to that, and how would the world react to that sort of turmoil of conflicting philosophies and drives and interests?"

I just now watched Taliesin's comment, and you're right, this is not supported by what actually happened in-game:

No, I think it was out of desperation the same way of, "Well, you know, we're going to war, we're going to need some materials. There's a bunch of people living here. What if they just weren't?"

There was no evident plan to eradicate or evict the locals. They hadn't become violent toward the locals at all.

I think anchoring on the first story they heard is part of it, but there was more to it. They worked themselves up into hating the temple. Then, after they slaughtered the guards and cleric, summoned a demon to help kill an angel, watched the surviving civilian Pelor-worshipers get shackled, and stood by as one young person was pressured into converting back to the local majority religion, they had to do some mental gymnastics to justify what they'd done.

If anyone needs a recap to understand why I think they worked themselves into a lather, read the italicized section below.

Matt pointed out that the big temple stood out like a sore thumb and had a couple of guards be gruff with them on the outskirts of town. Team Issylra took it from there, asking the herbalist leading questions about the temple being "oppressive" and not listening when he tried to explain that there was only some tension.

When asked if the temple was force-feeding them religion, he denied it: "They haven't been aggressive, forcefully, but at the same time, the people feel less and less safe."

When they asked the herbalist whether the milling felt "intrusive or invasive", he only said that according to Abaddina, "There has been a bit of a discontent from some of the land spirits when the Silvercall Mill has taken more than what was agreed upon, you know?" Suddenly Aimee/Deni$e exclaimed, "Oh, I fucking hate these people" and Marisha/Laudna agreed, and the players were off to the races, taking the worst possible view of the temple at every turn:

• When they heard that the guards had in the last few months started patrolling in the streets, trying to listen in on conversations, Deni$e declared them bullies and said she hated bullies.

• Later, Orym characterized the temple's few additional guards as a "maybe draconian response to lock things down" and speculated, "Maybe they're trying to bend as much faith as possible to their guy."

• And Marisha/Laudna somehow got the idea that the temple was holding a bunch of villagers prisoner.

It seems they were caught in a runaway process of uncharitable assumptions to demonize the target.

The fact that all three of the guest players disliked the gods from the start made a confrontation much more likely. Deni$e said "fuck them", apparently because she thought the gods never did anything for her. Bor'Dor, who had every reason to stoke a conflict, said, "It's hard to support them when we can see how much damage is being done in the name of god in your town." (What damage?) And Prism didn't like that the gods "seem to choose favorites," whatever that means.

The temple and the village had coexisted tolerably for 20 years! As the apogee solstice approached, Vasselheim slightly increased the number of visible guards and sent a couple of Judicators to Hearthdell, and they seemed nosy and intimidating, but still not actually injuring or jailing anyone, just looming and causing anxiety. (At the same time, the Loam & Leaf people were sending spies into the temple, so it seems like both sides were getting nosy.) The temple had peacefully converted a small number of people to the church of Pelor, but they were still a distinct minority in a village of 1,000 people. Vasselheim had plans to buy more land and build more temples, notably including a temple to Melora, which is not generally what one does when one is hoping to harmfully exploit the wilderness. Indeed, after 20 years of having a new and improved second mill, the forest in the area was still overgrown, not despoiled.

Maybe Matt had tilted things so they were more likely to hear the Loam & Leaf side first, but there was nothing inevitable about the way they approached the temple.

• Abaddina explicitly told them there were no commitments in going to the meeting; it was the PCs (starting with Ashton) who decided that just attending the meeting meant they were "in".

• At the meeting, when the players heard some villagers had unfounded conspiracy theories about the temple abducting the people who disappeared, instead of Team Issylra defusing the theories, Prism actually whispered, "Some of us share that conspiracy."

• And as Flameguide Kiro pointed out, they approached the temple unannounced under cover of night and plied her guards with alcohol, instead of sitting down, listening to the other side of the story, and having a conversation. So they put themselves in a position that required them to make their case in brief. Orym started by saying they had a common enemy, but then accused the temple of "putting your boot on the necks of farmers" and gave them hours, not days, to pack up and go to a different continent, based only on his word. Condemnation and ultimatum are not the most diplomatic way of trying to resolve the differences between the two groups.

After the battle, suddenly there was a new detail about the temple taking tithes from the populace, according to Abaddina. I don't know why that wouldn't have been mentioned before the fight, or how a handful of guards could tax a village of 1,000 people, with the whole Valley Coalition behind them, but I guess she was supposed to be telling the truth?

At any rate, there was nobody left to tell them they'd read the situation wrong. The part about the temple of Melora should have caused some cognitive dissonance, and Hevestro did mention that Abaddina had a radical Primordial-irredentist past. Once they learned Bor'Dor was a member of the Ruby Vanguard, they should have wondered whether he had helped lead them into a fight that undermined their cause.

By episode 65, the players had invented additional details to make the temple sound like it was crushing Hearthdell, and they were minimizing their own responsibility for what happened.

• Laudna claimed the temple of Pelor was built on "sacred land", when it was just some land that was for sale. (Granted, after the battle, Hevestro claimed the whole valley is sacred, but it's at least debatable how seriously one should take any idea of "sacred" that amounts to "you can sell the land as you please, but not to infidel foreigners.")

• Laudna also said the acolytes of Pelor "more or less took over" the village, and Orym claimed the temple was "clamping down" and "trying to enforce their [something]".

• Ashton promised FCG that they'd "politely asked them to leave" and merely "appealed to their sense of moral judgment as holy people."

• Then Ashton and Laudna invented this story: "We just saw a fucking god trying to wipe out the last of..." "The eidolons." "It was an attempt to destroy."

• Incredibly, Ashton and Laudna both assured Imogen, "It was a land grab," and Ashton said of the Pelor-worshipers, "It was very much, 'This is ours now, and you either leave or die'," which Laudna emphatically confirmed, "Yes." And that reverses the roles pretty much exactly: their own plan was to demand Pelor's faithful to immediately leave the land they'd bought two decades prior, or else! Remember:

LIAM: No, we're just going to ask them to leave and if they don't go, we're going to--
MARISHA: Fight.
LIAM: Yep.
TALIESIN: Definitely.
EMILY: I feel like we should hide out and be ready to attack from all angles because this parlay, no offense... is not going to happen.

In short, they remembered things that did not happen to cast themselves in a better light. It would have been hard to admit, even to themselves, that they had eagerly let their characters get drawn into leading a pogrom.

I agree with virtually everything you've said. It's interesting that Matt normally will correct players if they misremember or have apparently misinterpreted something an NPC said, but in this case he's letting them run with it. To me it's a good study in what can happen in real life where we don't have an omniscient GM keeping the record straight. I don't think any of the cast are intentionally lying (possibly someone has a hidden agenda but I'd be shocked if that were the case). I think, as you say, this is simply the normal human response to make facts fit an emotional response. I also think that Matt was nudging them in that direction, with the frankly terrifying Judicators and a suggestion that the temple workers were in some way Colonialist nature-haters. I wonder how much the guest players' world view had been filled in ahead of time by him, and my guess is quite a bit.

This isn't a rant at Matt, either. My suspicion is that he was trying to set this situation up to further explore different possible relationships between the gods and mortals. I kind of applaud trying to make the Prime Deities less knee-jerk "the good guys" and the Betrayers (from a branding perspective, what a terrible name!) "the bad guys", because EXU Calamity did a wonderful and fascinating job of that. Where the archivist in me cringes is when facts are misrepresented or misremembered in support of that position. I have sympathy for the players there because I know in my home game I'm probably the worst in the party for remembering facts, but thankfully others can walk and chew gum at the same time, take notes, and correct me when I'm wrong.

Sorry for the long-winded response, but I think you've done a masterful job of setting out the dissonances between what happened on-stream and the players' reactions/memories to it.