The changes don't read correctly to me. "By the time" doesn't fit with "the Centipede had been", because the Centipede's action in a perfect tense is past linked with present. It implies that the Centipede was asleep before "by the time".
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VorparDahl uses the perfect tense to show the order of actions. Perfect tenses can show the first action(s) in a sequence.That's exactly where I'm confused.