Politics of Karrnath
Kaius' deception that he is not only alive but in fact Kaius III isn't the easiest trick in the world. A large array of protective magics and practical effects work together to conceal his true nature.
Kaius' protections start with an Amulet of Nondetection, a rare wondrous item that maintains the nondetection spell on him permanently. Bound to the same protective Eberron dragonshard is an enchantment that protects Kaius from sunlight, negating both the damage and the disadvantage from his sunlight hypersensitivity trait. Because this amulet is so important to protecting him from harm, it's been specially crafted to have 20 HP and hardness 10 and been enchanted with Arcanist's Magic Aura to appear nonmagical.
To handle the long term logistics of Kaius' bloodthirst, he keeps a harem of willing supplicants, Blood of Vol devotees whom have been persuaded that the dark mistress behind the scenes does not care for their lives. The warforged Beauty guards the harem from wandering eyes, serving Kaius faithfully. The harem itself is protected by a Hallow spell protecting from radiant damage woven to exclude celestials, fiends, and undead that aren't Kaius or Moranna, while providing Kaius and his followers protection from radiant energy. Furthermore, the area is protected by a Private Sanctum spell, with all of the clauses active. Kaius' inner sanctum is beyond the harem, further warded by Glyphs of Warding keyed to explode at any creature besides him, Moranna, and Etrigani.
The Twist
Kaius III secretly being a vampire and also Kaius I is one of the most widely known "setting secrets". As such, DMs with players that are familiar with the setting may find the reveal insufficiently dramatic.
On his blog, Keith has suggested to add another layer of deception - Kaius III is the one in command of Karrnath, with Kaius I posing as Kaius III in Dreadhold. The main reason to do this would be the continued existence of Kaius I's vampiric sire, a creature capable of subverting even Kaius' iron will.
Five Nations
The vampiric nature of King Kaius III is one of Khorvaire’s best-kept secrets. Queen Etrigani knows the truth. So does Regent Moranna (who’s a vampire herself, bound to Kaius) and the members of Kaius’s harem and personal spellcasters.
High Priest Malevanor knows part of the truth. Vol has told him that Kaius III is a vampire, but not that Kaius III is actually Kaius I. Vol told Malevanor to tell no one this secret, so he hasn’t.
The rest of Kaius’s family don’t know the truth, but they’re all aware that something strange happened to him prior to the end of the Last War. Those relatives haven’t discussed the matter with each other; each believes he or she alone noticed unusual behavior on the king’s part. Kaius and Moranna have placed spies among their personal servants who know to be alert for any suspicious discussions. Warlord Thaurum is likewise in a position to suspect something, but not actually in the know.
None of the other palace staff or ministers know the truth. Beyond the borders of Karrnath, only Vol herself knows about Kaius’s vampirism and true history, although a prisoner in the darkest cell in Dread hold might know that the king isn’t who he claims to be. . .
Eberron Campaign Setting
Kaius III keeps a closely guarded secret. He is not who or what he appears to be. Only a handful of people in the inner sanctum of Kaius’s court have even the slightest inkling that something isn’t quite right, and even fewer know the truth of the situation. What is the truth? It’s a long, strange tale that boils down to this: Kaius III is Kaius I.
When the Last War was in full swing, Kaius I was approached by priests of the Blood of Vol. These priests promised to aid Karrnath against its enemies, provided Kaius agreed to a few “minor” considerations. With Cyre and Thrane pounding on his borders, and a breakdown in diplomatic relations that left Karrnath temporarily without allies, Kaius agreed to whatever terms the priests had—so long as he was provided with the means to repel the invaders.
First, the priests worked with Kaius’s own court wizards to perfect the process for creating zombie and skeleton troops to bolster Karrnath’s forces. With the addition of armor and weapons, as well as a slight increase in power, these undead were stronger and more formidable than the average mindless walking corpse. Second, the priests provided an elite fighting force dedicated to both Vol and Kaius—the Order of the Emerald Claw. “The Order will help you here and in distant lands, where its agents will foster unrest and revolution in the homes of your enemies,” the priests explained. Both of these gifts gave an immediate boost to Karrnath’s beleaguered forces, and the Order took credit for internal strife in Cyre, Breland, and Aundair.
When Vol, the ancient lich at the heart of the Blood of Vol cult, appeared before Kaius to collect her “considerations” for the aid her priests provided him, he had no choice but to submit. In addition to allowing the cult to establish temples and bases throughout Karrnath, Vol demanded that Kaius partake in the Sacrament of Blood. Instead of the usual ceremony, Vol invoked an ancient incantation that turned Kaius into a vampire. Instead of becoming a compliant thrall, however, Kaius fought to keep his independence. Furious that the vampire refused to be humbled, Vol eventually forced the issue by triggering Kaius’s blood lust (something he had been struggling to control). When the crimson haze cleared, Kaius discovered that he had killed his beloved wife.
Now, after eighty years of hiding and secretly working to break all ties with the Blood of Vol, Kaius (LE vampire [human], aristocrat 2/fighter 11) has returned to govern his nation. He has taken the place of his great-grandson, pretending to be Kaius III. With the aid of various magic items and abilities, he hides his vampiric nature. A burning desire to rebuild his shattered kingdom drives Kaius forward, making him one of the most troubled and dedicated rulers in all the land.