Note that als has sent the auxiliary verb habe to the end?
You are really saying 'I was in the castle when I Peter saw' (even more literally: 'I was in the castle when I Peter seen have')
Now practise joining sentences using other subordinating conjunctions.
Link the two sentences with the conjunction. Then write what the new sentence means in English.
Der Strom (plural die Ströme) means river or current. Es regnet in Strömen is the idiomatic way to say 'it is pouring' – literally it means it is raining in streams/currents.
But beware if you see a sign warning you of Strom – it is warning you of an electrical current, not a current in water.