What scriptures describe the previous birth of Asura Mahabali?

Question

Recently I watched a discourse of Sri Chaganti Koteswara Rao during Maha Sivaratri. He explained greatness of Shiva Lingam by citing the example of the previous birth of the Asura Mahabali. He said

Asura Mahabali was very wicked person in his previous birth. When he stole something, he hid on a bilva tree and when he was climbing the tree accidentally two leaves of bilva tree fell of Shiva Lingam under the tree. At the time of his death, Yama Ganas arrived and asked him to come to Yama loka. But at the same time Shiva ganas also arrived and there occurred a conflict between Shiva and Yama Ganas. Lord Yama went there and asked Bali whether he wanted to enjoy fruits of Good Karma or bad karma. Mahabali said he wanted to enjoy fruits of good Karma (Good Karma he did was only to anoint Lingam with Bilva leaves accidentally). So, as a result of good fruits, he got a chance to become Indra for one day. After becoming Indra, Mahabali donated Swarga loka to two sages (don't remember their names). As a result of this good deed, he was destined to born as Grandson of Prahlada.

I vaguely remember this story and forgive me if there are any mistakes. I could not find any source for this discourse.

So, my question is, what scriptures describe the story of the previous birth of the Asura Mahabali?

Answer 1

The story of Mahabali's previous birth is told in this excerpt from the Kedara Kanda of the Skanda Purana. It describes a gambler who has been a really big sinner all his life. One day he is taking some flowers, betel leaves, and sandal paste to pay a prostitute, when he is accosted by robbers who take all his possessions including his clothes, so all he has left are the flowers and the like. He then trips and falls on the ground, whereupon he's knocked unconscious. In the process, he drops the flowers, betas leaves, and sandal paste, making an unintentional offering to Shiva. When he wakes up, he was filled with remorse for all the sins he has committed in life.

Then the gambler dies and goes to Yamaloka, where Yama is ready to give him severe punishments for all his sins, but Yama's assistant Chitragupta informs him that he had made an offering to Shiva and so is entitled to rule in Devaloka for a period of one hour and twelve minutes. So for an hour and twelve minutes, the gambler becomes the new Indra, and out of devotion to Siva he spends his time giving away all of Indra's possessions to various rishis. When the real Indra gets his throne back, he notices all his possessions are gone, and when he finds out what happens he complains to Yama. Yama chastises the gambler, claiming that according to Hindu scripture charitable giving in allowed on Earth but not in Devaloka. Yama is once again ready to punish th gambler, but Chitragupta says that charitable giving is not a sin even in Devaloka if it's done for the sake of Shiva, and that these actions have freed the gambler from all his sins.

So then the gambler is reborn as Mahabali. By the way, Mahabali's father Virochana dies shortly before Mahabali is born, for reasons that I discuss in this answer.

In any case, this whole story bears a striking resemblance to the story of Ajamila, the sinner described in this chapter of the Srimad Bhagavatam who attained Moksha because he accidentally said "Narayana" before he died.