Now that prince, having ridden up to the mountain gate, saw no jade rabbit, only an arrow stuck upright in the gate-threshold.

The narrator switches viewpoint with 卻說, "now as for" — the storyteller changing camera. What the prince finds is an absence and an object. 插著 has 著 as zhe, standing there; 那太子 takes the pointing nà and 子 as zǐ.

The prince, greatly startled and losing colour, said, “How strange!

大驚失色 — greatly startled and losing colour — is still the standard four-character phrase for the blood draining out of a face. 怪哉 is "how strange!", with the old exclamatory 哉 marking it as the speech of an educated boy.

How strange!

Said twice, which is how the novel writes a person actually rattled.

Plainly my arrow struck the jade rabbit — how is it the rabbit is nowhere seen, and only the arrow is here?

He reasons it through and gets every step right except the conclusion. 分明 is "plainly"; 此間 is "here"; 箭中了 keeps 中 as zhòng, to hit — the fourth of the five times the chapter uses that reading, and every one of them belongs to this arrow.

It must be that, with the length of years, it has become a sprite.”

The explanation a Ming reader would also have reached for: anything old enough turns into a spirit. 年多日久 is long years and days; 精魅 is a sprite. He is wrong about the rabbit and right about the world.

He pulled out the arrow, raised his head to look, and on the mountain gate were five great characters, written: “Baolin Monastery, Built by Imperial Decree.”

Five great characters over the gate, and they change the scene. 敕建 chì jiàn means built by imperial decree — this is not just a temple, it is a foundation of his own dynasty. 看處 is "as he looked"; 寫著 has 著 as zhe.

The prince said, “I know it now.

知之矣 — "I have it" — in crisp literary Chinese, the register a prince slips into when he is pleased with himself. 太子 keeps 子 as zǐ.

In a former year I recall my father the king, in the Hall of Golden Bells, sent officers to bring gifts of gold and silk to these monks for the repair of the Buddha-hall and Buddha-images — little thought I to come here this day.

And the memory is of his father: gold and silk sent from the Hall of Golden Bells to repair this very hall. The chapter is bringing him to his father's memory before it brings him to his father's ghost. Note the spelling — the edition writes 佛象 here and 佛像 in the very next passage, two characters for the same word, one passage apart, each encoded as printed. 差官 has 差 as chāi, to dispatch, not chà; 賫 jī is to convey a gift; 記得 has 得 as dé; 向年間 takes jiān; 佛 is always fó.

Truly it is said: passing the cloister he met the monk and talked, and gained again a half-day’s leisure of this floating life.

The prince quotes poetry at himself, and the line is famous: a couplet by the Tang poet 李涉, from 《題鶴林寺僧舍》 — dropping in on a temple, falling into talk with a monk, and stealing half a day out of a hurried life. Two textual points. The received text has 竹院, "bamboo cloister" — 鶴林寺 was anciently called 古竹院, so the phrase names that temple itself — where this edition writes 道院, encoded here as printed. And circulating versions give 偷得, "stole," for this text's 又得, "gained again" (得 read dé). Note too that the edition treats these lines as a quotation, not as one of its own verse set-pieces — which is why they carry no verse marking whatever their metre.

Let me just go in and take a look about.”

走走 — "take a turn about." The doubled verb makes it casual, which is the last casual thing he will do in this chapter.