I think the problem with xCx is that the madman is too hard to factor into our plans, he's just too unstable to control, or to manipulate into doing our bidding. That makes him a foil to us as much as an ally, which I don't consider very useful. Far better to have the warrior on our side and manipulate him against the others, Aodh might do so otherwise. Now that I consider it I also think that Axx might be a mistake without AAx to counter Aodh. Far better to know the general gist of the plan rather than giving off emotions to Aodh when something occurs involving our Watchers.
Perhaps you're right. However, I could see lots of benefits to using the madman. For example, right now there's a lot of internal turmoil within the Empire. If we secretly aid the madman and help him here and there, that means that the various Watcher factions will be focusing their attention on dealing with him rather than worrying about our manipulations. There's a lot of opportunity for cunning misdirection, I feel.
However, I don't really think that 1A is a bright idea in conjunction with 2B/1A. We would be able to root out the truth via telepathy in due time, and I'd rather not leak anything to Aodh without having done our homework on him first. 1B might be okay because it means that we will at least know enough so as to not foil our own plans, but I think that 1A gives way too much away. The slight amount of information that we might leak with 1B is stuff that Aodh would probably know at this point anyways.
I really think that we ought to strike a balance here - we need to know enough so that we have enough information to base our decisions on, but at the same time, I believe that knowing too much is a liability around Aodh.
BBA/BCA is the right call here, and I think you guys should flop to that. It seems to be the most cohesive plan of the bunch. 1B would allow us to have just enough information for our plans, 2B gives us muscle to shore up our martial weaknesses (as well as deal with any traitors within our own faction after we sacrificed two pawns), and 3A would allow us to learn and discover things around us faster - telepathy is just about the best skill you could have in dealing with the court intrigue.
Edit: Boom, right here. I have a plan in favour of the madman:
In the confusion of the raid, the Watchers had struck quickly and efficiently. As you looked through the list of the dead, you found that the targets had been people who were not the most prominent, but had a crucial role in swaying both public and noble opinion. The ones who died hailed from many factions, including Runikylos's own. If there was a secret war going on, it was probably much larger than you had expected. In the mean time, you had become part of Runikylos's inner circle, one that included his own Watchers.
Now, during this raid, the Imperial Army's Watchers gave advance warning, so there was a mix of Watchers from many various factions who died. Everybody knew it was coming, which is why the secret Watcher war remains at a stalemate. A bunch of people from various factions died, but no ground was gained by anyone.
However, let's say we work with the madman - I believe we could carry out something on the scale of the Night of the Long Knives. So let's say that the madman attacks again, under our "guidance"... except this time, only our people know he's coming. We could use the confusion of a siege to wipe out most of our political enemies in one fell swoop.
That being said, I guess I'm okay with an alliance with the Soldier since it's lower risk. Nevertheless, I do think that a cunning individual like Dio could really make use of the madman, as unpredictable as he is.