(And yeah, it looks like those spoilers were true.)
The episode opens on the scene we saw in the international preview - Tyreese takes out a few zombies with a hammer, then he and his group, including one woman who's already infected, are working their way up through a damaged portion of the fence to a burned-out part of the prison.
Andrea is looking at the Governor's family photos when he joins her in his room; she says she has to help Milton get rid of the body from last episode, and that she wants to do it even though the Governor says she doesn't have to because she wants to be a part of the community. He leaves the room they were in together and goes to his "man cave" to see Penny, who is chained up with a bag over her head. Switching on music and then talking to her, he clearly still holds out hope that the failure of last week's experiment didn't mean anything for the long-term. He sings to her while she strains at the end of her chain's length. He tells her to look at him, but she's just making zombie noises, grunting and snarling and staring at something else, so be becomes agitated, yells at her and then locks her back up.
In the room where Glenn and Maggie are being kept, she clarifies for anyone still wondering that the Governor didn't rape her last week.
Back in the Governor's office, he tells Merle that he wants to take out the threat at the prison--not to take it over, but just so they're not a problem. Daryl will be spared, he says, provided he agrees to be Woodbury's inside man and to help get them in. Glenn and Maggie, though, won't be spared.
Michonne takes the rescue party to the building where she was held during her questioning; nobody's there, and they wonder whether to trust her.
A Woodbury resident enters the building, and they force him to the ground, bind him and gag him once they establish he doesn't know anything.
Back at the prison, Axel is clearly flirting with Beth, who doesn't seem to notice, but Carol does, and pulls him aside to tell him to back off.
Back in Woodbury, the search and rescue party bursts into the streets, guns blazing and turns the community into a mob scene. Through gas grenades and noise, a firefight takes place as they find and escort Maggie and Glenn; Andrea tells the Governor that she saw one of them--but it was Oscar, not someone she'd recognize, and the one who's wearing a prison uniform, presumably giving the Governor an excuse. Daryl tells the rest of the group to move along, and hangs back to provide cover fire, and Rick hallucinates and believes he's seeing Shane. The bearded man (not Shane) blasts Oscar with a shotgun and kills him before Rick shoots him in the face.
Back at the prison, Carl, Hershel and Beth hear screams from elsewhere in the prison. At first, Carl worries that it might be Carol and Axel, but then he decides to go check it out, bringing his gun with him. After a while in the dark corridor, he finds himself staring down a walker in a dress just outside the place where Lori died; he then locates Tyreese's group, fighting off a gang of walkers, and shoots two of them, urging the living to follow him.
They do so, with Carl shooting walkers along the way and Tyreese's group refusing to leave their bitten friend behind.
Back in Woodbury, Michonne is staked out in the Governor's apartment when she hears knocking at a door. She wanders into his room of doom and eventually (as we've seen in the previews) finds not only the creepy aquarium tableau, but also Penny, still bound and chained and with a bag over her head. Thinking it's a child in need of assistance, she puts the sword down to release her...and of course finds herself nearly bitten for her trouble when she removes the bag.
Realizing it's a walker, she is about to kill Penny when the Governor comes in and begs her not to. He leaves his gun on the table and seems, momentarily, very human. Michonne stabs Penny through the head from behind, and the Governor tackles her, knocking away the sword and trying to strangle her until Michonne turns the tables. In the ensuing fight, one of the head-aquariums is destroyed and Michonne makes her escape by stabbing out the Governor's eye with a piece of the glass. Before she can kill him, though, Andrea shows up with a gun and chases her off.
Back in the prison, Donna has died during transit and is about to turn. Carl tells them he'll take care of it, but Tyreese wants to do it with a hammer instead, because they take care of their own. Carl leaves, locking the door behind him, which upsets Tyreese's group. He tells them that they have food, water and a secure room. One woman gets agitated, but Tyreese tells her to calm down, that the prison is the best shelter they've had in weeks and that they don't want trouble.
At the Woodbury infirmary, Andrea asks the Governor what was going on with Michonne (he says she came back to kill him) and about the fish tanks (he explains that the same way the CBLDF Liberty Annual did); she asks about Penny and he doesn't respond.
Milton enters, followed by Merle, and the Governor turns, exposing his eyepatch and a glare, and tells them he was attacked, but doesn't say it was Michonne. Merle promises to take care of it in the morning.
Michonne rejoins Rick's group as they're waiting for Daryl, and he demands (gun to her head) to know where she was; she doens't say, but tells Rick that she'll help to either bring the survivors back to the prison or to go back into Woodbury after Daryl.
At the arena in Woodbury, the Governor stands before his people and works them up into a fear-frenzy, laying the blame on "terrorists who want to destroy us and worse," accusing Merle of being a traitor and leading Rick's group to the city. He's stripped of his bladed prosthetic, and then pushed into the arena with the Governor where he unveils Daryl. While the group is demanding the Dixons be killed, Andrea appears to finally connect the dots and have the realization of who she was probably just shooting at.