Valuing his own independence is not the same as valuing freedom generally. A mercenary that valued freedom generally would refuse to fight for tyrants. He'd refuse to assist in subjugating peoples. Yet you insist that he's clearly lawful and evil.
What I'm saying, is that a lawful evil character could be a freedom fighter. Do you disagree?
Could every value become corrupted? What would that mean? Certainly people can do bad things with the best of intentions, but does that mean the value itself was corrupted? What values do you have in mind?
What I mean is that most values aren't inherently good. In other words, just because you hold a "good value" in high regard, does not automatically make you a good person. And neither does holding a "bad value" in high regard, automatically make you a villain. Good values can be upheld for the wrong reasons, and bad values can be upheld for the right reasons.
This goes back to my old slave master example.
The players delivered a bunch of Kturgian pirates to a slave master, and then debated the morality of slavery with him. The slave master argued that the country is at war, and that the Kturgian pirates are there for considered enemy combatants. By putting them to work, they are helping the war efforts. Where as, if they had been set free, they would soon return to their killing and plundering. Had they been put in jail, they would surely been subjected to cruel torture, and then probably hanged. So the slave master argued, that slavery was the merciful thing to do. And sure, some masters may treat their slaves badly, but most of them were alright. The players couldn't really disagree with the man.
That's not mercy. That's not even an act of mercy. Mercy implies that you give a person better than they deserve. The knight in question isn't showing mercy to unarmed opponents. He simply has a code that says peasants are unworthy foes for him. By not slaying them, he's giving them what he believes that they deserve owing to their station as peasants. Mercy has no part of that.
So an evil character is not capable of giving a person better than he deserves? Why not? Does one good deed automatically turn a villain into a good guy? Are villains incapable of doing good things, or showing kindness?
This is utterly illogical and I'm struggling to even understand what this could mean. If a character has no relationship to something external to himself, how in the world could you consider them lawful?
Lawful does not mean that a character follows the law. He could also follow a code, or a set of personal tenets. As such you could have a lawful evil character who rules over no one, and yet serves no one either.