Yes, the Blue Fairy said that to Pinocchio. This clip shows the BF turning Pinocchio into a real boy: http://www.youtube.com/watch?v=N7DvCi1EV3c
Based on a recent spoiler, I’d guess the healer and August may have no interaction at all. Rather, we might see the Blue Fairy turn August back into a real man and simultaneously see the healer return Philip’s soul to his body in a parallel plot that takes place in present-day FTL with Mulan and Aurora along for the ride.
This is the most likely scenario imo…I think that August being turned back into a real man may also have to do with making some amends.
The truth part may mean he has to come clean about some of the things he has done and said so I’m wondering if we won’t get the full “what happened with Neal and the box” story until this episode. Was hoping to have that in Manhattan but it wouldn’t be the first time things have gone forward without all the clues being put into place. Emma still hasn’t connected the fact that the letter she got in prison was from Phuket…the same place August admitted he spent most of his time at.
Not sure about him having to die…seems to me if they are dealing with a healer in FTL backstory and they are successful with reuniting Phillip with his soul that they would be successful making August real again and each would go to live out their own lives…but then again they may indeed intend to put the Pinnocchio story to rest…as little as we’ve seen August this season I guess that could be the case.