Once the name changes back to it's original color normal PvP rules are applied. You will only loose points from your food bar - eat something to remedy the problem. You will not drop items or loose level. The guards will attack you up to 24 hours after last kill until you die at least once. Once you die or 24 hour passes the guards will not attack you.
Most monsters have an alignment index which determines whether they are chaotic, neutral or lawful.
By killing lawful monsters your alignment will turn chaotic and by killing chaotic monsters it will eventually turn neutral and then lawful. I am unable to take off an item. First make sure that the armor does not have any item worn over it. If you are wearing Plate Mail and a cloak, you will need to take the cloak off first. If this is not the problem you may have a cursed item.