So... this is the last issue of The Insane Asylum as it appears here, published in December of 2008. Almost exactly seven years ago! Wow. I never continued this plotline in any other media, though I reused a lot of these characters. I did reboot The Insane Asylum later, and I'll post those here as well, but this cliffhanger never did get resolved.
In the interest of disclosure, I'm going to reproduce here the entirety of my notes for this storyline, for the one person out there who's actually in suspense.
Mr. Saturn and Kirby are playing Blue's video game (called 'Bats in the Belfry'). They reach the point where Celeste summons Catastrophe and Azure manages to irritate him enough to leave. This scene is brought to the attention of Marx. Marx, sensing a chance to do something seriously evil, contacts Catastrophe and informs him of his portrayal in the game. Angered, Catastrophe prepares to venture to the location of TIA and unleash angry vengeance. (Perhaps reveal a new form for travelling, that would be easier for spriting?)
Over the next few days, nature begins to get out of whack. Celeste notices this first as we learn about her geomancer abilities - her closeness to nature alerts her to this. Animals have left, the days seem darker, and overall everything just feels off.
On the final day of act 1, we see Catastrophe's silhouette in the sun...
Upon seeing the silhouette, Powers Jr. leaves Earth to go to his father. He pleads his case with the Powers What Is, but TPWI claim that everything is going according to plan. Powers Jr. tries to leave back to Earth and relay this new bit of information, but TPWI prevent him from leaving. We see a shot of Catastrophe mentioning to TPWI that that was a wise choice, claiming that he knows TPWI's one weakness. TPWI think to themselves that he has no weakness; rather, he has another reason.
Catastrophe moves closer to Earth. Marx appears and asks what the delay is. Catastrophe reveals that he wants the crew to dread and fear his coming. Catastrophe also says that Marx had better remember his place. Marx smirks and says no more, but he thinks to himself that he has a plan in place, should the situation go beyond his control...
Cole then finishes a series of days in a library, doing research. He reveals that Catastrophe is, accurately, a demigod. He mentions that demigods are the result of a god and a human, and visits the grave of the human rumored to be Catastrophe's parent. The tombstone is long since rubbed down - you can barely read the name. The tombstone, however, has a secret compartment in which a journal is stored. The journal is of the mother of Catastrophe, who expresses regret at Catastrophe. She then mentions the only spell able to defeat him and also says that Catastrophe is, at last check, the only one who knows the spell. When he was younger - centuries ago - he eliminated every person aside from himself who knew the spell. Cole then does a quick burst of mental work, coming to the conclusion that Blue would have to learn the spell (call it Degen for now... Indignation?). Before he can leave, however, Cole is attacked by a random encounter. Because of his physical frailty, it looks like Cole is done for.
Back at the normal location, the crew is anxiously awaiting Cole's findings. Catastrophe has been getting steadily closer. Just when everyone has lost hope, Cole shows up, bruised and beaten. However, he's still as lucid as ever, and begins telling what he found.
Cole relays the information about the spell to Blue, who is less than pleased. He mentions that he is averse to pain. That is when Catastrophe calls down from the heavens his intentions, as well as the fact that it was Blue's game that angered him. Blue grudgingly accepts that the whole mess is his fault. He begins to form a plan: he will taunt Catastrophe into using the spell. (Cole mentions that accounts from Catastrophe's time on Earth say that he is notoriously proud and susceptible to taunting.)
Meanwhile, Marx mentions this to Catastrophe. Catastrophe doesn't believe Marx; he thinks that the crew would be terrorized. He claims Marx is lying and attacks him, reverting him to normal Marx and sending him spiraling to Earth.
Blue then calls out to Catastrophe. Catastrophe obliges, reverting to his normal form, and attacks Blue with a large spell. It takes a bit to clear, but when it does, it's revealed that Kirby has deflected the attack as Mirror Kirby. Unfortunately, the attack scattered to the surrounding area, scarring it and turning it into the scenery we see in the future. Catastrophe becomes angry and uses an attack he is sure will go through Kirby's Reflect - Degen. It does, and Blue gets warped to an alternate dimension. It's filled with large, nasty-looking fiends, and Blue admits that he wasn't quite sure what to do at this point in the plan. That's when Marx shows up, burned from Catastrophe's attack, and warps Blue back out. Back on Earth, Catastrophe is wreaking havoc, with only Kirby and the rest of the crew holding out. Blue calls Catastrophe's attention once more and fires the attack at him, sealing Catastrophe in the alternate dimension.