Back at the clinic, Kaethe Gregorovius expresses her jealousy and dislike of Nicole to Franz, who has been paying extra attention to the patient in Dick's absence. Franz reminds her that it is Nicole's money that has paid for the clinic.
Following the dinner held upon Dick's return, Kaethe resumes her criticism, calling attention to his wounds and scars: "He's been on debauch!" (p. 241); "Dick is no longer a serious man" (p. 241). Although Franz immediately comes to Dick's defense, the viewpoint sinks in and permanently changes his opinion of Dick Diver.
In May, when Dick enters Franz's office to tell him that the beloved artist for whom Dick has been caring has died, Franz sends him to Lausanne to take care of a case of a Chilean man trying to cure his son of homosexuality. Dick meets a Spaniard named Senor Pardo y Cuidad Real, who is furious about his son's lack of self-control in sex and drinking. Dick meets the son, Francisco, who is about twenty and who expresses a desire to change his behavior. Suddenly, Royal Dumphry appears, and both Dick and Francisco (from shame) try to escape him. At the last moment, Dumphry reveals that Devereux Warren is in Lausanne and is dying. Dick gets the name of Doctor Dangeu and calls him immediately. At Doctor Dangeu's house, Dick learns that Mr. Warren is indeed dying imminently due to alcohol-related liver failure.
That evening, Dick sees Senor Real, who pleads with Dick to cure Francisco and to take him back to the clinic, but Dick refuses, saying that he cannot commit a person on such grounds. Dick then meets the doctor in the lobby, who tells him that Mr. Warren has requested to see Nicole. Dick goes to visit him and tells him that he will consult Franz to determine if Nicole is strong enough to see her father. Dick calls the clinic and leaves a message with Kaethe for Franz that Nicole's father is dying and that Franz should call Dick. He forgets to warn her not to tell Nicole and, perhaps accidentally, Kaethe spills the bad news. Nicole gets on a train to Lausanne.
Back in Lausanne, a nun informs Dick that Mr. Warren has left, presumably for America. When he meets Nicole at the station, he informs her of Mr. Warren's departure. They go for a drink, planning to return home the next day.
One week later, patient Von Cohn Morris (committed primarily to be cured of alcoholism) is removed from the clinic by his parents, who are furious at their son's report that Dick often smells of liquor. Upon reflection, Dick realizes that he has been drinking a half-pint of alcohol a da. He decides to cut back by half. When Franz arrives, Dick tells him about the "rotten scene" (p. 254) with the Morrises. Franz expresses his concern over Dick's drinking habits and suggests that he take another leave of absence. They both agree that Dick's "heart is not in the project anymore" (p. 256) and decide to take Nicole's money out of the hospital gradually. Dick is relieved, having long felt "the ethics of his profession dissolving into a lifeless mass" (p. 256).
The Divers decide to move back to their home on the French Riviera, and they spend the preceding summer in German spas and French Cathedral towns. Dick becomes preoccupied with his children and notices, with concern, that Topsy looks very much like her mother. They are also very wealthy and travel in style with enormous amounts of belongings. They arrive at Boyen to spend a few weeks with Mary North, now the Contessa di Minghetti since being re-married. In private, Dick and Nicole make fun of Mary. Nicole decides that Lanier and Topsy must stay away from the Conte's children, one of whom is ill. After dinner, Nicole reprimands Dick for drinking so much and then saying inadvisable things. Dick admits that he is "not much like [himself] any more" (p. 260).
The next day, Lanier reports to his parents that he was instructed to take a bath in one of the di Minghetti children's dirty bathwater. When they see a woman whom they assume is the maid, they reprimand her for bathing Lanier in the dirty bathwater. The next morning, Mary confronts the Divers with the story, explaining that they had mistaken di Minghetti's sister for a maid and that Dick had been too drunk to understand Mary the other night when she told Dick that they were Himadoun. They call Lanier in to settle the matter of the dirty bathwater, and they discover that he was probably mistaken. The Divers write apology notes to the Himadoun and leave early, having deeply insulted Mary.
At Villa Diana, Dick fires the cook, Augustine (who is brandishing a knife), for drinking the vintage wines. She reciprocates by telling Nicole that he drinks "all the time" (p. 265). Dick offers her twice as much money as he owes her to make her leave hastily. Over dinner, Nicole wonders aloud if they can continue as they are, and she tells Dick that he used to want to create things, but now he just wants to "smash them up" (p. 267). She is frightened by his silence, his violence, and his "almost unnatural interest in the children" (p. 267). Drunk, Dick insists that they go out to the motor yacht to ask the people on it if they are happy. They are invited onto the yacht, and they join the party.
Tommy is there, and Nicole runs to him ecstatically. The two talk affectionately. In the dining salon, Dick argues with Lady Carolyn and offends her after she accuses him of "associating with a questionable crowd in Lausanne" (p. 272). Dick disappears for a while, and Nicole finds him at the bow. He says they are both ruined and grabs her as if they will jump to their death together over the bow, but he lets her go.
Tommy finds the two of them and brings them back inside. He notes to Nicole that Dick is drinking too much. On shore, Tommy drives them home as Dick falls into a drunken sleep.
Dick's excursion to cure a young Chilean man of his homosexuality and alcoholism is extremely ironic (if not also hypocritical) in light of his own problems with drinking and his abnormal sexual interests. Senor Real describes his son as "corrupt" (p. 244) and complains that his son has no self-control. He begs Dick to treat his son, even to bring him back to the clinic, not realizing that Dick is no longer capable of helping anyone. He already described himself as the "Black Death," and his existence has indeed transformed into a kind of fatal infection. In fact, nevertheless, Dick and Francisco have a long and pleasant conversation, and Dick is able to relate himself to this man: "It was as close as Dick had ever come to comprehending such a character from any but the pathological angle" (p. 245). Dick is able to think beyond the homophobia of the local culture not as a matter of justice, but because he finally can identify personally with the notion of pervasive perversion.
Indeed, the fact that Dick has lost all self-control is apparent in these chapters, which describe the severity of his alcoholism and how it ruins his career. When he returns from Rome, Kaethe Gregorovius sees the wounds on his face and smells the alcohol on his breath, and she sees more clearly than anyone else that "Dick is no longer a serious man" (p. 241). The reader becomes even more convinced when the parents of one of Dick's patients remove him from the clinic because of Dick's drinking. Throughout Dick's decline, much of his behavior has been presented from Dick's own perspective. Now that Fitzgerald provides more objective views of Dick Diver, it becomes even more apparent that he has completely deteriorated. As a result of this disintegration, Franz asks him to leave the clinic, and it is without any regret whatsoever that Dick throws away the career that used to be his most important personal ambition (even if he was never fully dedicated even to that profession).
The incest motif also reappears in this section, as Dick becomes aware that Topsy looks like Nicole: "She was nine and very fair and exquisitely made like Nicole, and in the past Dick had worried about that" (p. 257). Though the exact source of Dick's worry remains ambiguous, the implication is that he worried he would become sexually attracted to his daughter. To extend the established similarities between Dick and Devereux Warren is the realization that he has an unhealthy preoccupation with his own daughter. He spends a great deal of time with them and seems to derive his only pleasure from their company. Nicole senses this problem and is disturbed by his "almost unnatural interest in the children" (p. 267).
This fear and disappointment is perhaps what drives Nicole to Tommy Barban's side on the yacht and, eventually into her romantic relationship with and marriage to Tommy. In fact, just as the death of Dick's father marked the true terminus of Dick's former strength and opened the way for his increasing weakness, so does the death of Devereux Warren mark the point at which Nicole finally turns securely toward increasing strength and eventual recovery. After all, Dick is too tied up with her former illness and on-again, off-again recovery.