According to him, a group of Altmer refugees were fleeing from Alinor. He as a soldier was stationed in Hammerfell in 4E 42, and was helping the refugees find safety. While there, suddenly the district he was in was violently burned down, and all the refugees massacred. It's why he seems to have a great dislike for the Thalmor and requested his position in Skyrim following the Great War in order to watch the Thalmor.
There is no record of this in any books as far as I can see. The closest is http://www.imperial-library.info/content/great-war
Given the event described, there most certainly was "internal strife" in the Dominion, potentially a full blown civil war. At the very least, an elvish version of the Great Terror certainly did occur.