'American Horror Story': Ryan Murphy teases next week's finale, 'There's only one person left standing' -- EXCLUSIVE

[SPOILER ALERT IF YOU HAVEN'T SEEN THE LATEST AMERICAN HORROR STORY: ASYLUM!!!]

We only have one more episode of American Horror Story: Asylum and the most recent, “Continuum,” certainly advanced the plot into surprising directions. Lana (Sarah Paulson) is now a published—and quite successful—author despite turning her back on her promise of taking down Briarcliff. Kit (Evan Peters) has had to raise his two children alone after Alma (Britne Oldford) killed Grace (Lizzie Brochere). And Jude (Jessica Lange) found herself falling further down the well into insanity. EW talked to co-creator Ryan Murphy about all these developments as well as next week’s finale which he says will leave only one character standing.

ENTERTAINMENT WEEKLY: This episode basically focuses on each of the three leads and then they come together at the very end. What inspired the format for this episode?
RYAN MURPHY: I think we just wanted to spend our time with resolving a lot of those stories. I think it was interesting because a lot of those people had never been together. We’ve never had Alma and Grace and Kit all together. I think the idea was just to spend a good chunk of time with them and see what that relationship was like which was very interesting with all the progressive, free-love, civil rights stuff so that was one thing.

The funny thing about the second act which is Jessica and Franny Conroy is I think at one point as we were spitballing season two before we landed on the asylum idea, we had actually talked about doing the second season in a prison but then Alcatraz came along and stole that idea. [laughs] It was never very definitive but I always liked that idea. I think an insane asylum for us was probably much more effective. I love the idea of showing Jude’s descent. We wrote it and directed and shot it much like one of those ‘50s ladies in prison movies which I was always obsessed with. As a child I was obsessed with this movie called Caged which was like tough broads standing against Jimmy Cagney. I was really thrilled with Franny Conroy’s brilliant lady gangster interpretation. She was so brilliant and I loved her henchwoman and I loved the whole idea that Jude thought that woman is death. And I love love the actress who plays the new ward of Briarcliff, Robin Bartlett, who’s in one of my favorite Mike Nichols movies Heartburn.

All of that Lana stuff was really modeled after Truman Capote and his complete In Cold Blood fame grab. Lana has sorta become Truman Capote meets Jackie Susann. I thought it was just fascinating and moving and totally understandable that after all the horrors Lana took refuge and solace in fame and money and celebrity and glamour. I really understood that for her. Then I love how they all dovetailed.

It does sort of seem like Lana is a horrible person now.
Oh no! No! After what Lana went through, if she wants to throw on some lip gloss and go on f—ing Dick Cavett? No, I don’t think she’s horrible at all. I think she hardened up and I think lost her way, which we will find in the last episode to chilling results.

Is this basically leading up to a battle between old Lana and 48-year old Bloody Face?
Yes. It’s sort of a Barbara Walters vs. Ted Bundy extravaganza in that finale. That is part of the finale, which is very unexpected, and there’s a lot of other things. I think the finale is my favorite episode we’ve ever done. It was directed by Alfonso Gomez-Rejon and written by Tim Minear. I think it’s even better than “I Am Anne Frank Part II”, which was previously my favorite. The whole thing is done almost as a documentary with Lana current day looking back on her life and doing a 60 Minutes-esque [interview]. That plays with like 10 different time periods. It was a very ambitious script and a very ambitious shoot and Alfonso knocked it out of the park as did Tim.

The season finale is crazy good. Everyone who has seen it has cried and that includes me and network executives. It’s very, very emotional and sad.

Is there like a battle between him and Lana? Are we talking wrestling match?
I don’t want to give too much away. It’s much more emotional than Grand Guignol. It’s something that John Landgraf and I talked about at length before I wrote it. This season was so dark which I loved but I felt it was important in the finale to give a sense of kindness and peace and resolve whenever possible along with some really scary things. So it’s a very very satisfying finale. I think there’s not a single stone unturned. All the questions are answered and more. The question I get asked the most is, “Who or what chopped off Adam Levine’s arm?” We dedicate an entire cold opening to that.

What will Kit’s life be like now as a single father and with Alma and Grace dead?
Just wait. It’s all explained in the last episode.

So Jude is full on crazy now?
Yes. She has lost it completely and I think she lost it because of the betrayals and I think based on all of our research all of those people in those institutions were given elephant sized, copious amounts of tranquilizers and downers to keep them docile. I think she’s been put on so many of them that her brain is fried as you will in the next episode, the finale, which is so good.

That must have been fun to write Jude and Pepper being the star duo of Briarcliff.
I loved that. I love that it turns out it’s all in her mind and Pepper’s been dead. I love that last scene and I think Jessica just killed it in that scene as did Sarah and in that scene.

Will we see the Monsignor in the finale?
Oh yes.

Will we see how Dylan learned that his father is Bloody Face?
Yeah.

There’s another big tease to season three in the finale?
Yes.

Is this one more obvious?
No. We [put clues] in the last four. We were lucky enough to know the arena we were going to be writing in. No one has completely gotten it. People have gotten some of it. I think after the last two people are gonna get it.

And there’s one in tonight’s episode, “Continuum,” right?
There is one in tonight’s.

Is the Angel of Death back in the finale?
Oh yeah. The question is, Who is she going to get?

Will there be more deaths in the season finale?
Oh yes. There’s only one person left standing after the season finale [laughs].

You were nominated for 3 GLAAD awards today for AHS: Asylum, Glee, and The New Normal. That must be very rewarding.
Yeah, anytime you get recognized for your work it’s great. I think that those three nominations are great simply because they all have really strong gay and lesbian characters in them. From where I started in my career with Popular in like the late ‘90s, it was hours and hours of discussions about whether or not I could have a character be gay or kiss. In a relatively short amount of time it’s become a real non-issue. To me the victory of that is all of the network executives–and there are many of them on these 3 shows–have all been so supportive and never blinked an eye and always encouraged us to write what we wanted and never censored us. I think that was great. I remember when I first started going to the GLAAD awards when I was a young chickadee with big hair, people were just so grateful for any morsel they could get and the landscape is so broad. It’s a really interesting mark of progression.

Read more:
‘American Horror Story': Ryan Murphy on Dylan McDermott’s shocking opening scene and even more clues to season 3 — EXCLUSIVE
‘American Horror Story’ recap: Booby Trapped
‘American Horror Story': Ryan Murphy on this week’s major character deaths and hints about season 3 — EXCLUSIVE

Follow Tim on Twitter: @EWTimStack

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