Well, it's a good thing I made a save just before going in to the shrine..lol. I don't usually read walkthru's and such...I just play on my own so a lot is left to my own discovery. Being the rebel that I am, when the guards in the shrine told me i was being framed and I was going to jail...I said no way...and killed them all. (lol) I had no idea there was a quest afterwards in the mine. So I have loaded up the save and will play it differently so that I will be able to get around in Markarth again. ( This however is not how I would have really done it though..I would have killed the guards on the spot for trying to play me for a fool, which I am not. ) :) They honestly should have given you a way to bust the crooked guards...or kill them and then prove your innocence. I hate being forced to do something I would never have chosen to do if this were really taking place.

Anyway...with that dilemma resolved I have 1 important question...I f I let them arrest me...do I get everything I am carrying taken away and DO I get it BACK? I suppose I could fast travel to Winterhold and stash everything first before going in to the shrine if I am going to lose it all...lmao.

If you get arrested at the shrine then yes you get it back, unless the item is tagged as stolen in red font. In which case you just go to the evidence chests to get your stolen items back as well.

Just a note: The aftermath is bugged all to hell. Those guards in the shrine don't go away and WILL attempt to arrest you again, leading to all sorts of problems since the quest is finished. Apparently they respawn, so killing them isn't a solution either.

This quest has a lot of bugs, but I got through it fine. When the crooked guards approached me I just let them arrest me straight up without killing anyone. In the mine I didn't kill anyone, either (except for one person I was told to kill; but I won't spoil anything for you), and just did what they all told me to do. I got my stuff back fine, and nothing's glitched that I know of.