Baltasar de la Cueva, Count of Castellar

Viceroy Cueva took steps to protect the Pacific coast from English and Dutch incursions. At the time there were various indications and rumours indicating that the English had established bases in the fjords and channels of Patagonia. Following orders issued by Cueva Bartolomé Gallardo led in 1674 an expedition from Chiloé that reaching as far south as the Gulf of Penas (47° S).[5] In this expedition an indigenous Chono named Cristóbal Talcapillán served as guide.[6]

In 1675, Cueva sent a new and larger expedition led by Antonio de Vea to western Patagonia. The Antonio de Vea expedition of 1675–1676 dispelled rumours about English bases as it found that Cristóbal Talcapillán had been fabricating stories to please the Spanish.[7] While the expedition was away 8,433 men were mobilized in Peru to face an eventual conflict with the English.[8] The military in Peru had also received large donations for the defense expenses.[8]

As sixteen men had disappeared at Evangelistas Islets in February 1676 during the expedition to Patagonia, Cueva ordered the governments of Chile, Chiloé and Buenos Aires to inquire about their fate.[8] However no information about their fate came forth and it is presumed that the boat they travelled in wrecked in the same storm that forced the remaining party to leave the area.[8][9]

According to Cueva, Talcapillán was condemned to two hundred lashes in addition to a lifetime sentence of penal labour of quarrying stone in San Lorenzo Island for use in the walls of the local presidio.[8]

During this time a curious fraud occurred, resulting in an Indian uprising. Rumors of enormous wealth hidden generations earlier by the indigenous in caves and lakes circulated widely. A campesino born in Quito (some sources say he was born in Spain) named Pedro Bohórquez took advantage of these rumors. He announced that he was Inca Hualpa, a descendant of Atahualpa, and a prince of the Andes. He spoke perfect Quichúa and had been accepted as a prince by the Andean tribes of Tucumán (Argentina). He claimed that his subjects knew the locations of the hidden treasures, and with that claim he was able to take in the governor of Río de la Plata, Alonso Mercado y Villacorta, marqués de Villacorta.

Inca Hualpa told the governor that for him to be able to get the information from the few subjects who knew it, the governor would need to recognize him as Prince of the Land. Only that would give him the authority to take possession of the hidden treasures. The governor did allow the Indigenous to proclaim him prince, and he even left with an entourage to greet and congratulate Inca Huallpa. The latter set out to meet the governor. They met in Tafí and exchanged compliments.

When Viceroy Cueva heard of the fraud, he ordered that Bohórquez (Inca Hualpa) be arrested. Bohórquez returned to his followers in the Andes, where he denounced the "treason" of the Spanish and incited the Indigenous to revolt. The Calchaquíes took up arms, but they were disastrously defeated. The survivors were distributed to encomiendas. Other associated tribes were removed from their mountain valleys and transported to distant places. The Quilmes were transported to Buenos Aires, where a town still bears that name. Bohórquez himself was taken to Lima and hanged.

Other reports claim that Bohorques had earlier duped Viceroy Cueva, making him think that he had discovered the "fabulous country of Enin, and visited its gold palaces and precious treasures." The viceroy was deceived, and gave him 36 soldiers. Bohórquez then disappeared.