Good news for the Eagles has been as scarce as a Stern John goal during a turbulent season in south London.
But both came along at once on Tuesday with the club's administrators announcing they had finally found a potential buyer before Trinidad striker John grabbed his first Eagles goal since joining some eight months ago to help sink the Hornets.
Sean Scannell and Neil Danns chipped in after the break as Palace edged to within a point of their opponents, who pulled one back through Danny Graham but are sitting nervously just one place above the drop zone.
Watford could count themselves hard done by, however, despite the scoreline.
They hit the woodwork three times, found Eagles goalkeeper Julian Speroni and defender Paddy McCarthy in inspired form and referee Paul Taylor in a forgiving mood until he sent off Palace defender Lee Hills late on.
Boss Malky Mackay felt they should have had an early penalty when Will Buckley's cross struck McCarthy's arm, but ref Taylor was unmoved.
Watford were denied a 15th-minute opener when Speroni superbly kept out Martin Taylor's point-blank header, and they came even closer when Tom Cleverley's 20-yard drive crashed against the crossbar.
But against the run of play Palace took the lead on the half-hour when Johnny Ertl's cross found its way to the far post where John, who was farmed out on loan to Ipswich earlier this term, was unmarked and headed past Scott Loach.
Watford went straight back on the attack but were frustrated again when a diving header by Henri Lansbury from Cleverley's corner somehow stayed out courtesy of the inside of the far post.
And shortly after the interval the visitors went two up. Scannell's initial header, from Darren Ambrose's cross, came back off the post but the rebound fell kindly for Palace as the young winger picked himself off the floor and sidefooted the ball past Loach.
Watford attempted to hit back again but Heidar Helguson put a lob over the top and fired another effort wide, before Danns hit the third with 25 minutes to go.
Loach could only parry Scannell's shot straight into the air and Danns was on hand to rifle the loose ball into an empty net.
Amazingly, Cleverley hit the post again with a 20-yard curler before Hornets substitute Graham finally found the net for their consolation.
Left-back Hills, who escaped with a booking for hauling down Lansbury in the first half, was sent off in the closing stages for a second yellow but Palace were celebrating moments later.