Re: When is the limit on favor advancement lifted?
As others said before, you cannot advance to the second section of the favor tracks while you are still scoring the first section of the castle.
This may not be very clear in the rules, but the FAQ (for instance on Ystari website http://www.ystari.com/caylus/FAQE.pdf and probably somewhere on BGG too) mentions this point.
Q: Is the third column of the favor tracks available during the scoring of the dungeon?
A: No. The third column is only available once this scoring is completed. The earliest opportunity to use this column is during phase 3 of the next turn, by using the joust field. Similarly, the last column of the favor tracks is not available during the scoring of the walls.
The whole FAQ (one page) might be worth reading, although (in my very biased opinion) the answers to most of the questions can be deduced from the rules.