But when we saw Pain before Jiraiya entered, he already had the form of the Fuuma shinobi or Yahiko.
This is why I am confused... There HAS to be a connection to the kids he trained (Rinnegan, their appearance) But it's also connected to jiraiya somehow..

This was one of the best eps I've seen in a long time... a LONG time. My mouth was literally hanging open the whole way through... amazing...so sad..