To put everything in a nutshell, Episode 8 reveals that Episodes 1 & 2 were complete fictions, made up from whole cloth and written by Yasu, who is Shannon/Kannon/Beatrice/the kitchen sink. Every episode after the first two are fictions written by Hachijou and an older amnesic Battler working together, trying to make sense of Battler's twisted and half-remembered memories.

So, basically Episode 8 reveals everything that happened didn't happen and we have no way of knowing what information, if any, is actually based off the truth. Oh, and it's also suggested that Battler may have been one of the murderers along with Kyrie and Rudolf, who were tagged as the "true culprits". Except not. Or maybe they were. Who knows? Ryukishi ain't gonna tell us and we have no way of finding out.