I know this is an older post, but it is very frustrating dealing with "You're interrupting the Court" loop 20 hours into a new character.
If anyone else runs into the missing Varnius Junius bug I figured I would leave this here. I tried console commands to advance "The Man Who Cried Wolf" quest and unchecking possible conflicting mods and reloading which didn't seem to work for me.
What did help was hitting Sybille Stentor (she survived FYI) with a few ice spikes and then immediately surrendering to the Solitude guards and paying my bounty. This allowed the scene to be skipped/advance without Varnius and then I was able to continue the quest by speaking to Falk Firebeard.
Hopefully this helps!