In 1002, following Eckard's failed attempt at the throne and subsequent assassination, Boleslaus occupied Meissen, but the new King Henry IV forced him to leave it and accept the March of Lusatia instead. Lusatia was thus detached from Meissen, which was bestowed on Gunzelin at Boleslaus' demand.
In Autumn 1004, Gunzelin took part in Henry's successful siege of Burg Budusin, near Bautzen, which had been occupied by the Poles in 1002. It is reported by Thietmar of Merseburg that the castle would have been rased if not for Gunzelin's insistence that the Poles be allowed to depart freely and the castle preserved. The retreating Poles, however, devastated parts of his march. Gunzelin thereafter resided in Budusin.
Gunzelin feuded with his nephews, Herman and Eckard II, in what was one of 11th-century Germany's ugliest civil wars. The feud concerned "the insult and humiliation entailed in taking and destroying a fortified residence. It also concerned the allegation that Gunzelin had sold captured Wends to the Jews as slaves. The slave trade in Slavs was a large issue in northeastern Germany at the time. Sometimes even fellow Germans were enslaved. Most slaves were the product of capture in war. The Church, however, largely opposed the slave trade: Thietmar railed against the "barbaric" practice the Saxons had shown of dividing up families in order to sell them.
Gunzelin and Boleslaus maintained friendly relations until 1009, when the former was deposed by Henry on suspicion of an alliance with Boleslaus against him. He had travelled to Merseburg for a Fürstentag, where he was arrested and handed over to the safekeeping of the Arnulf, Bishop of Halberstadt. Gunzelin was imprisoned for eight years in the farming village of Ströbeck in the Archdiocese of Magdeburg and his office bestowed on his nephew. He spent his imprisonment playing chess and teaching it to the local people. Released in 1017, he died soon thereafter.