You do not have to to tie up with either Erathia or Avlee.I suggest you do the Quests both the Elf King and Queen Catherine give you (rather than try to please just one).
When the time comes and you are told about the Musical Intrument that can spur on the winning side, go to battle that will be taking place outside of the Tularean Caves, open the box. Having got a horn doing that, go to the arbiter in Harmondale and give him your instrument. He can then be the judge of should should get your horn.
As you have swung-both-ways, neither side will dominate the other and you can be the Gay Lord of Harmondale.
You will get slightly less cash but more experience