After cleaning up the lighthouse, the crew accompany Norilo to his trading interest at Daggerford, further down the coast. They are stopped by a ghost, specifically one of an Androsphinx, who charges them to answer a riddle (which they do) then avenge his murder at the hands of some kobolds. They go to his cave and find three things: the signs of a struggle, that the place has been stripped of treasure, and a scared kobold called Jaalask, who agrees to show them the kobold camp. He is as good as his word and allows himself to be ‘captured’ so that if the group should lose the battle it will not look so bad for him.
He needn’t have bothered, as the group makes quick work of the kobolds, sleeping the inattentive guards and slaying the rest. There is, however, no sign of the sorcerer who is said to have been their leader. Perhaps, says Jaalask, he has gone to the local town to trade his loot?