There is a ton of confusion over the Jaren Ward/Dredgen Yor/Shin Malphur/Last Word/ Thorn.
But the most reasonable explanation "imo" is that Jaren Ward arrives at Palamon (idk what reason) and then everyone comes to view him.
Young Shin Malphur comes to get a close look and Jaren Ward offers him the Last Word. (I think he did this because he already had Thorn at this time) Young Shin Malphur refuses, but like he said, it wasn't the last time he held it. As the Thorn slowly corrupts him, Jaren Ward turns into Dredgen Yor, (I think this because they both we're considered beacons of hope, but it says that Dredgen Yor is the "first and last descendant of the name Yor" during this transformation. (Also if you think of it Dredgen Yor and Jaren Ward kinda sounds similar)
Dredgen Yor starts killing random townies of Palamon, and Magistrate Loken takes this into notice. Then Loken, and his nine men, confront Jaren Ward/Dredgen Yor, everyone thought that it was just because Magistrate Loken was corrupted, as Shin Malphur notes, he remembers the Last Word being lightweight, so it wasn't the first day Jaren Ward came he was confronted. Corrupted Jaren Ward kills the ten people and probably massacre the rest of the town (not in the time ofc) except Shin Malphur. Shin Malphur probably trains himself (because he wasn't even born a Guardian) and then confronts and kills Dredgen Yor on Dwindler's Ridge.
Also I believe this is how it went down because if Dredgen Yor killed Jaren Ward, it would cause an uproar, because Shin Malphur said that he was one of the very best Guardians out there, and if he was murdered, it would've been mentioned more.
BUT YES AGAIN, this is all opinion.
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I think you're almost on point with this. The change I would make is that Jaren actually transformed at the Ridge into Yor and faked his death so the name Jaren Ward wouldn't be tarnished and he could leave a beacon of hope behind as a last good act before changing into Dredgen Yor. Shin Malphur watches as Jaren Ward removes a despot leader / dictator and doesn't kill everyone - only the one guy is killed by Ward. Then they begin traveling as his deed (to purge the cities corruption) was completed. During the travels Ward understand he must leave his student behind and stages his death (mentioned above) to spur Shin Malphur onto a righteous path. If you review the Thorn cards it mentions both Dredgen Yor and Jaren Wards names in the scramble section alluding to the fact he was alive beyond the transformation on the ridge. Again like you said it is speculation and I'm only offering my perspective; doesn't mean that I'm 100% correct.