Soon after the party enters the Tanglewood, disturbing news begins to circulate through the community. Gerald and Elizabeth Baler, a couple living on the outskirts of town near to Lensing Manor, found their young daughter Thalia missing from her bed early that morning. There were no signs of a struggle or intrusion. Arlen organizes a search.
The search for Thalia Baler continues. Arlen and Willem inspect the entrance to the grombel lair to confirm that it has not been disturbed. Villagers begin to mutter ugly suspicions regarding Martin and Emil, conjecturing that they bewitched Mabe into leaving town (almost certainly to his doom), and casting blame upon them for stirring up an ancient evil from its long slumber.
Syreel and Arlen interview Martin and Emil. Syreel is satisfied of their innocence, but Arlen advises them not to attempt to leave town until Thalia’s fate is discovered or at least until Mabe returns.
At night, an angry crowd gathers outside the inn, brandishing torches and pitchforks. Arlen and Willem convince them to disperse.
The presence of Martin and Emil at the Iron Axe Inn becomes too much of a problem for business. Toby Kolb requests that other accommodations be found for the harried pair. After expressing deep concern over the continuing absence of Mabe, a seemingly remorseful Arlen invites them to lodge with him and his father Colby.
A pair of adventurers from Fourwell named Morton and Sig arrive in town. They decide to stay and help investigate the recent disturbances, expressing a keen interest in the historical aspects of the case. They camp out near the entrance to the grombel lair.
Morton and Sig decide to investigate Lensing Manor. After obtaining directions from Arlen, they head out and are not seen again that day.
Lobeck, the young son of Wrig and Hora Steinfell and nephew of Arlen and Mabe, is reported missing from his bed early in the morning! Arlen and Willem discover that Morton and Sig never returned to their campsite. In a panic, Arlen decides to enter the grombel lair and Willem reluctantly accompanies him. Unfortunately, two smaller “statues” that had been previously discovered there are now all too animate. Arlen is slain by these creatures and Willem barely escapes with many wounds. He reports that the creatures seemed immune to their weapons and that a strange mist gathered about them as they fought. He also notes that they would have slain him as well, except that they seemed reluctant to follow him out of the tunnel into the light of day.
Mabe finally emerges from the forest to find all in uproar!