Nice work. I have a couple of comments:
The ungrammatical incomplete sentence in lu-li'u quotes makes me much more uncomfortable than if it was an incomplete sentence standing on its own. It's understandable when a sentence is ungrammatical because the speaker didn't finish it, because they were interrupted, got sidetracked or whatever, but it's different when the missing words are not at the end of the sentence, i.e. in this case when "li'u" appears in an ungrammatical position. I don't know what the general answer should be for how to quote interrupted sentences (you obviously felt as I do that lo'u-le'u as a cop-out is unsatisfying), but in this case you could just avoid the issue by using "i jo nai" instead of "go nai ... gi ..."..
The second comment is about "ba'e" in:
-.i ri cmene lo selsa'a ku xu
- na go'i .i do na jimpe .i ra ba'e cmene lo cmene
Assuming the emphasis marks the rheme/comment as opposed to the theme/topic, I would expect the "ba'e" on the second cmene. The first cmene just repeats Alice's sentence, so it's not what the White Knight is correcting. I understand the sentence structure is somewhat different in Lojban than in the original, but the "ba'e" there just sounds off to me.
mu'o mi'e xorxes