Alright, I wake up after blacking out with a drinking buddy at Whiterun across the map in Markarth. I go down to the little market, see some guy pull a dagger out and attack a woman. I blow him the [censored] away with the Yol shout.

This guy comes up to me and gives me a note, I meet him and investigate the Forsworn. I learn their king is in Cidhna Mine, and eventually end up there. I side with the king, with a motive to use him to escape, gain his trust, then betray him.

I escape, get my things back, fight along side the Forsworn to kill the guards (because they're corrupt), then eventually, I go to the Forsworn hideout and kill everyone, including my friend Madanach.

However, every time I pass a guard in Markarth (the nicest looking city, where I bought my house) he screams "By order of the Jarl, stand fast" and if I talk to them, they call me out for being a Forsworn and the dialogue sends me to Cidhna Mine, but I'm done with the quest and have no bounty so I don't actually go.

I can exit dialogue and walk away after they seek to arrest me sometimes, but other times I get the guards drawing weapons to attack and arrest me.

Is there any way to fix this? What if I stole a carrot and served a day in jail?

Can't say I have ever experienced that.

It's because you attacked the guards alongside the Forsworn. I stood back and watched the chaos unfold below me, and snuck away after I got bored of watching the two sides fight. I've never had a problem. The guards will attack you/arrest you if you side with the Forsworn AND charge out with them.

It's a bug. If you've got a PC you can fix it using a console command. If you're on a 360 or PS3 you have to wait for a patch. Another way to fix it is to side with the Stormcloaks during the Civil War and when you take the town your rep will be reset as a new jarl takes control of the city. and the corrupt guards are replaced.

I had the Cidna Mines thing happen and I wasn't using my quest log too carefully in my previously very bugged playthrough and didn't know I had to go to Cidna Mines to complete the quest. I didn't want to go there. I didn't kill anyone. And I ended up killing every single guard in the city -- I had a very defensible position. Fus Ro Dah from high point kills. Markarth became a very quiet place. The guards do respawn after a couple of weeks of game time and I had to do some stuff for the Thieves Guild there and had to take out all the guards again before continuing.

Do a save. Steal a carrot. Get caught. Serve a day in jail. See what happens. If that doesn't work, join the Stormcloaks.