We came across this situation in a recent game, and weren't sure how to resolve it, and I'm not entirely sure what we did was correct.

I had an Arkham encounter (let's say in the Library) that said to immediately move to an Other World (let's say The Abyss), have an encounter there, then immediately return. The Other World encounter I drew was "A monster appears," and the monster was a Nightgaunt. I fail the first combat check, and am therefore forced through the nearest gate.

Which gate? And if I do go through a gate because of the Nightgaunt, what happens with the last part of the Arkham Encounter that says I immediately return to the Library?

We ended up deciding that since the nearest gate was one in Arkham going to the City of Leng, I would complete the Arkham Encounter, return to the Library, then be forced through the gate to the City of Leng.

After reading the FAQ...

Q: What happens if you draw a nightgaunt (special ability: if you fail a Combat check against a nightgaunt, you are drawn through the nearest open gate) as an Other World Encounter?
A: The nearest gate is the gate back to Arkham, so you are immediately returned to Arkham and given an “explored” marker. Thematically, as servants of Nodens, nightgaunts sometimes helped investigators.

...I believe the proper way to handle it would have been:

1. Draw Arkham encounter
2. Move to The Abyss
3. Draw the encounter and battle the Nightgaunt
4. After failing the combat check, Nightgaunt's ability forces me back through the gate to the Library (because the Arkham encounter essentially opened a temporary gate)
5. The final part of the Arkham encounter has no effect as I have already returned to the Library

Can anyone confirm/correct my interpretation?

Assuming my interpretation is correct, I also have a side question:

What if there was an existing gate marker to The Abyss already on the board? Could the Nightgaunt's ability force me through that gate instead, giving me an explored marker, and the ability to close the gate?

I am thinking no. There are 2 gates in the The Abyss right now: the temporary caused by the encounter and the other because of the gate marker. The temporary can be thought of as being in the first other world area (the "entrance" to The Abyss), and the marker in the second (the "exit" from The Abyss). The closest would therefore be the temporary in the first other world area.

Thank you in advance!

DH

Uh, the nearest gate is actually the gate back to Arkham. If there is an open gate to "The Abyss" then he returns to the open gate and gains an Explored token. If there is no open gate, he gets Lost in Time and Space. Since the second encounter at the "moved to" place moves you again, that encounter now takes precedence and you won't go back to your original Arkham location.

You also couldn't close the gate because you didn't start the AE phase on the gate.