Pete may not actually be a VILLAIN per se, but more like a jaded, selfish, desperate, cynical, pointy-eared old grouch. And he might have been DRIVEN to it. Think about when he said "no matter what I do, the mortals get their happily ever afters" (as I heard). It's almost as if he might be saying "what about ME, huh?!
It still doesn't excuse what he's done to King, or his lies to Mr. Milton, and I still am angry at him as a character for that, but I think I might understand him a little better. He's an immortal nerd who's had rotten luck that may have turned him into a jerk, and Dragon isn't helping matters, he's in trouble with the big authorities, and he's facing the possibility of having to be FORCED to wait on objective time again, like he may have in the temple.
Wow. Even the CELESTIAL creatures have a world that sucks, to some degree.

