SnotlinG,
I don't recall anything strange about the hero offer because I've been declining all that I have received for the past 15+ turns.
The corruption in the city of Kortol started before that hero offer. A few turns before that I captured Kortol with a hero stack and moved it to the dock next to the city into boat form and then set move paths for lots of other stacks to come to Kortol. On the AI turn he sent a stack to recapture the empty city but they didn't reach it. On my next turn I set my hero stack to come back into the city to defend it and then hit the Move All button. By the time the Move All ended something was wrong because my hero stack disappeared and was not in the city (remember it came from a boat) and the hero menu showed I had 1 less hero (ie my hero disappeared entirely). There was little I could do but end the turn. On the AI turn he attacked me in the city and killed 1 unit (probably in the upper left corner of the city) and on my next turn my Hero stack was there as if there was never a problem (he even showed in the battle report so while the display was wrong the game knew I had a hero stack there). But I suspect that's when the corruption started and it had to do with Move All converting that hero stack back from a boat into the city and moving across existing stacks/armies that were coming into that city via the Move All command. I'll see if I can make it happen again by converting a stack there into a boat.
KGB