The trio awakes after a fitful sleep in the crypt, gather their wits, and head down the stairs leading out of the room. They arrive in another room with a sludge pit, where a slime-covered stone suspended from the ceiling and skulls are staked upon more caskets. They attempt to launch an attack on the kobolds playing some sort of game in this room, but find themselves somewhat overwhelmed at first, taking a few cracks to the skull with the tied stone being tossed back and forth by the kobolds on the ledges before them. The three eventually clean up the kobolds and the guard drakes awaiting them behind the door out of the room, patch themselves up, and proceed into a square room trapped with a rolling boulder and being overseen by a kobold Wyrmpriest.
Many kobolds occupy the room, and a spiretop drake flies about, but the three are able to temporarily placate it by scattering gold coins about, distracting it for a time. They are eventually succesful in clearing the room, and though they discover a magic staff (identified as a +1 Staff of the War Mage) on the body of the Wyrmpriest, they are unable to locate the dragonhide that Teldorthan asked them to retrieve.
They locate a key and a note indicating it is to be used in an apparent dead-end alcove in the same room, and they use it where indicated, opening a hidden door leading to some stairs. They follow the stairs, and the stone walls dissipate into rough caverns. Here, they find the temperature unnaturally cold, with a frozen pool of water in the middle.
As they proceed a bit further, they find a Tiefling wizard chained to the wall. Morgue, in pursuit of justice and in the name of racial solidarity, frees the wizard, who identifies himself as Typhus. He explains he has been caught by a disguised changeling he met in Irontown, who tricked him and put him to sleep. When he awakened, he was shackled in this cavern. He has been able to identify the "protector" of the kobolds here: a young white dragon named Szartharrax. At this point, the dragon emerges from further within the cave, and attacks the four gathered there. After a long battle and some close brushes with death, they are ultimately victorious, and Zil'dejin deals the finishing blow to Szartharrax. They then discover his nest, containing a +1 Lifedrinker Longsword (taken by Zil'dejin), a pearl in a bag (pearl taken by Morgue, bag taken by Typhus), and the dragon hide they sought, as well as some gold coins.
They return to Lakeside late in the evening, and return the dragon hide to Teldorthan who rewards them They return to Lakeside late in the evening, and return the dragon hide to Teldorthan who rewards them for their efforts and dismisses them promptly, preferring to spend as little time as possible with Tam’elanath. They move towards Sandercot’s Provisioners to perhaps try and sell of the pearl, but on the way there, it breaks open to reveal a rolled scrap of parchment inside, with Draconic script upon it. Zil’dejin reads it, and identifies that it is not written by a native speaker of the language, but is addressed to Szartharrax signaling a monster uprising on Lakeside, to be initiated by an individual named “Ironteeth” from what is only referred to as the “Winterhaven Stronghold.”
The party considers following up on this lead, but first retires back to Tam’elanath’s hovel for some much deserved rest. Typhus, having nowhere else to stay and having been of great help in the battle against Szartharrax, joins them, but is forced to sleep in the shed with Zil'dejin. Hereafter Typhus would never speak of this again.