OK, I intentionally repeated the experiment, achieving some truly bizarre results:
First, here is what I did:
(Note: I have a backup of my game before doing all this so I can go back and undo all this if I want.)
I went to the Mystical Disapearing Castle(hereafter to be reffered to as the 'MDC'). I entered the MDC first without wearing the special item of apparel. I don't want to spoil the mystery of the MDC so I am being intentionally vague when necessary, I hope you can understand. Of course, instead of entering the MDC, I was in a giant grassland instead. I saved my game here. I exited the grassland, returning to the main map, where the MDC is once again visible.
I now put on the necessary attire for entering an MDC; one should always be properly dressed for such a special occasion!
I entered the MDC, removed the special apparel, and saved my game again. For my final step, I chose "Revert to Saved" from the "File" menu and wallah!; I was now in the Twilight Zone!
Here are most of the results:
(Please note, many changes occured, I am sure that I have ommited some!)
1. Most, but not all of the items in my inventory were duplicated. Items that you can not duplicate in any other fashion that I know of except maybe using file editor(which I did not!) Some example are: the "Sword of Heroes", the Crolna, my Magic Book(can't remember the proper name), and pretty much everything else.
2. Items which were in my inventory before when I think I visited the MDC, but have been used or left behind, were copied back into my inventory. For example, the Disks of Maayti, the small black stones, and some random other equipment which I had dropped like a fishing pole.
3. Most, but not all the items my character was wearing, could be removed TWICE! from my character's body. That's right: I now had a spare copy of all the mystical armor stuff: the helm, the dead animal cape, the aligator skin boots(I know their not exactly mystical), Alaric's Amulet Necklace, and the belt.
4. Most of my party also was wearing duplicate copies of their equipment. I don't know if they would have gained any extra benefit from wearing two layers of steal armor, but it did register in their encumbrance.
5. My character was no longer equiped with the weapons I went in with, but was now equiped with a third copy of the magic staff which I had been using the first time I visited the MDC previously in the game. Interestingly enough, I still had a short sword equiped in one hand even though I had a two-handed staff(under normal conditions!) in the other hand!
The weapon that the staff replaced was gone forever, which is why I made sure to put the sword of heroes into my equipment but not have it in my hands ready to use as a weapon. This effect of losing a weapons seems to be one of only two negative effects I can identify.
6. The second negative effect is hard to explain. I was wearing the mystical belt which increases your body stat. Since I now was wearing two belts however, my character's body was not increased for the second belt.
But, when I removed each belt, my character's body attribute was penalized normally resulting in a net loss of 6 body points(I think). The lesson here is this, to be safe, don't equip(that means wearing it or having items in your hands). Just keep everything you want duplicated in your character's inventory.
Well, in conclusion, I am sure I don't yet fully understand this anomoly, but it seems that you could use repeatedly to create a full set of mystical armor, aligator boots, sword of heroes, etc., one for each party member.
A final note:
My system is loaded up with extensions and control panels which do seem to interfere with Cythera from time to time. I have not yet tried to repeat this using a clean system. I would love to hear from other people who try this out, if it works on your system or not?