When did Mousillon fall again? How many years ago? Cause we're about at least a hundred years before Karl.
Technically? Mousillon was falling while Landuin, it's first Duke and one of the original Grail Companions and once considered the greatest knight to ever live, was in charge. It was once one of the best slices of Bretonnian land, until the Landuin's sorrow and the subsequent failures of his successors in reversing it came upon it. But even then, it persisted for centuries afterwards, with good leaders and bad, but none ever seemed able to reverse the decline into a marshy, dark, bog-ridden scrabble rock place of quiet despair and desperation. Landuin's grief, the how and why of it, is another story though. The point is, Mousillon started at the pinnacle, and was sliding ever since.
But the full fall, I suppose, you could consider when Mousillon had it's status as a true Dukedom stripped from it. Which was brought about when Duke Maldred the Mad, well, went mad. It was he and a handful of others who instigated the the
Affair of the False Grail. Basically, he got so desperate to reverse Mousillon's downward slide that he took to darker routes to restore the Dukedom to glory. See all that occured in the linked article to the wiki above as to what happened.
However, for the canon of this quest, Maldred had a younger brother, Roland. Who has featured in the quest for quite some time. Roland's specific involvement was as a landed knight, and alongside his brother tirelessly attempted to purge the darkness of Mousillon. Unfortunately, that darkness overwhelmed Maldred, but not Roland, and that event can be seen in
Karak Ungor 92, through flashback. Roland's been journeying ever since, going Questing Knight in an effort to redeem all of Mousillon, with the true Grail and the Lady's favor. The Fay Enchantress even banished him from Bretonnia's borders until he finds it or dies, though not cut off communications with Bretonnia entirely.
Date-wise? The Affair of the False Grail lasted from 2297 to 2300, and Roland left Bretonnia soon afterwards. No new Duke was appointed by King Gaston in 2300 IC, so that is, I suppose, when Mousillon finally completed it's 'fall', and in canon it would continue to decay all the way up until it was proclaimed the Barony of the Damned in 2522 IC, aka Karl Franz's time. The current date of the quest is 2343.