Final Report, as follows:
At approximately 12:10 PM on July 30th, 2012 (GMT -6), Rainy and Knitefall were engaged in an argument of an unspecified nature, stemming from a negative interaction between the two of them earlier when Knitefall was retaliating against a couple of people in the out lands for attempting to stage an ambush on him. This negative interaction was the result of Knitefall and Rainy having engaged in combat, Knitefall using an enderpearl to get away, and then Rainy calling a foul on him - resulting in the argument at the listed time.
A few minutes into the argument, it appears that Rainy and Knitefall had, despite their argument, agreed that nothing would be done to either of them in a town called "The Shire" (owned by captin_pie). Upon the enactment of this agreement, Rainy immediately went against it, using lava buckets first to try and kill Knitefall in the town while he was semi-afk. Knite returned to see himself burning in the lava, so he quickly jumped into the nearby lake to rescue himself from imminent death.
This is some of the fallout from that lava that was destroyed by Rainy with cobblestone to clean it up:
Upon entering a small alcove inside of the pond, Rainy barricaded him inside with a couple of fences (since Knite was not a part of the town, he was unable to break them). He placed a bucket of lava in the room, picked it up after a second, according to the LB logs.
After doing this, he teleported out, which was around the time that I stepped in and asked what was going on, just to have Knitefall tell me he'd been attacked by Rainy in a no-pvp zone (which the Shire is) and that he was going to post about it on the forums. Attached are screenshots of the LB logs of each event in question, posted below the appropriate paragraph.
My personal interpretation of the situation is based on prior treatments of people who have engaged in similar activities - I have seen people have punishments administered for engaging in PVP in roundabout ways before, despite being in a non-PVP city or protected area (potions, lava, flint and steel, etc.) I have seen at least one ban as a result of lava use for PVP in non-PVP zones, and plenty of lesser punishments by several mods, such as jail or a monetary fine.
I was also under the impression from Akomine that one last conflict involving Rainy and a jailable/bannable offense would result in a permaban that could be appealed, but would be unlikely to be accepted. That information is for the mods to decide to do with what they will.
Such is my report on the matter.
~ Islid
EDIT:
For clarification, when a topic is locked, that doesn't mean "HEY GO PUT UP ANOTHER ONE BECAUSE THAT'S OBVIOUSLY WHAT THEY WANT ME TO DO". It means shut the hell up for awhile until the topic is unlocked, or don't worry about it.
Admins lock a topic because they want a cessation of replies for a period of time on the subject matter being discussed. Making another topic is not a cessation of discussion, it's just incredibly irritating and makes admins not like the things you do even more.
You need to be careful, Rainy. The last thing you need to be doing right now is using a flamethrower to burn your last bridges.