It's so easy to see how this finishes...
The assumed villain is the Crooked Man, and he may be the prime antagonist. But the true culprit is Cryer, who lives in the Woodlands. Faith is most likely alive, seeing as the mirror would not disclose her location (but did disclose her deceased father's). The killings haven't been killings at all; Cryer probably positioned the "head" on the doorstep in an effort to provoke Fabletown into thinking a true killer was on the loose. By episode five, Bigby will have been provoked to an extent where his human form will be harder and harder to control; the real wolf will have been set loose.
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I agree that Bigby could get in trouble for aggressive behavior and might even lose it a little at some point but the rest is pure speculation and nothing more. There is a possibility he will go on an unauthorized hunt for the suspects in Episode 5 and that's where he could go overboard if the player chooses to play ruthlessly. Bigby does have control over himself in his true form as well, as far as I know.
Think that the reason for why the mirror doesn't disclose Faith's location is due to Crane rigging the mirror so that Georgie's hookers wouldn't be seen with their clients as a way to appease the Crooked Man into decreasing his debt or something. Think that Faith's dead for sure.
If Faith wasn't actually dead, than a glamour would've been used to disguise her. Lily's glamour wore off pretty quickly, and I think Swineheart would have noticed if Faith's head had turned into another Fable.