A few quick questions for the "Lawful and Good" Paladin proponents.
The Law states, "You must kill 10 peasants by Sundown to do the Rite of Demon Summoning" The King, the legitimate law of the land, has issued this as a direct edict to you, his Deputy.
What do you do? The King is obviously evil. But, that is now a legitimate law from Legitimate authority.
IMC, being "Lawful" does not mean blindly obeying corrupt or ridiculous laws. It is more like following the ideals set out by the Geneva Convention. Some space is given for unique nations, if the laws arent draconian, or plain evil, but just because something is writ into law does not make it just, nor does it mean a Paladin should lose his paladinhood for not only ignoring that law, but actively opposing it.
Is actively opposing a legitimate law a chaotic act? I would state no, depending on what that law is.
A Paladin of a good god might find the law states all Paladins are to be killed on sight. When he enters the land, does he instantly kill himself? One would hope not.
I would argue that a Paladin must uphold the Laws of his god, church, or land, depending on which one he is a Paladin of. If he lives by a code, then he must follow it. And thats it. Illegitimate laws and illegitimate authority has no hold over Paladins IMC.
The Paladin in this campaign, depending on who he worships/works for, would not have lost his Paladinhood for anything, to this point, but, he might have gotten a stern talking to for burning down the house.