Arriving at Moonstone Keep, Relentless, Capriole, Ehljayy, Ash and Cileth are shown into the audience chamber to meet with the Lord Warden, Faren Markelhay, in front of a crowd of concerned citizens. He calls on them to account for the spreading rumours of monsters living beneath Fallcrest, which have grown to include everything from kobolds to dragons, beholders and mind flayers – all because of Relentless’ request to some passing villagers to ask around for information. Relentless angrily defends her decision, accusing the Lord Warden of shirking his duties to the city. Capriole, angry that the authorities did nothing to find the Lost Ones, reveals his demonic powers. The Lord Warden is about to have Capriole taken to the dungeons when Relentless talks him down.
Once he is satisfied that the city should be safe from immediate threat, Markelhay clears the room save for the adventurers, a few guards and his wife, the Lady Allande. During extended questioning by the Lord Warden, the party tell their story more or less as it happened - though Ash claims that the Brass dragon left, alive, after they encountered it in the kobold tunnels, and the others, though confused, support his version of events. Lady Markelhay, a talented wizard, casts a divination spell and believes there is no sign of the dragon. The Lord Warden reveals that it was known kobolds lived under the city, but they’d never been any trouble before, hardly even venturing out of their tunnels. The more powerful ones they encountered were not typical of the kobolds known to the authorities, but when they mention the possible connection to a red dragon, it sparks a memory.
Checking the records, Lord and Lady Markelhay confirm the information given to the party by Nimozaran the Green – there was a red dragon who lived in these lands. It came from the mountains to the northwest, and for a time made its lair in an old manor house, abandoned a century ago, a few hours ride from the city. The Lord Warden agrees to lend the party horses so they can travel to the manor and investigate it, and though he disagrees that it is his job to care for orphans, he does make arrangements for the Lost Ones to be taken into the care of the priests of Moonsong Temple.
The party spend the day making preparations, then set out at first light. They investigate the manor, which they find has a huge hole smashed in the roof, and the interior walls on the first and ground floors destroyed – consistent with a dragon making it into a lair. There’s no sign, however, of the dragon’s presence, or of a dragon hoard – though Relentless does find a 500 coppers coin, of the sort used in Gamric (and Chalice). Descending into the intact basement of the manor, they find little of interest…until they reach the furthest room on the first basement level, where they are ambushed by four figures: a violent half-orc, a thuggish dwarf, and two humans.
Ehljayy rushes into the fray, but is surprised by a thunderwave spell cast by the human he had planned to attack, buying some time for the half-orc and dwarf to rush forward and attack, and for their other human companion to strike from his hiding place in the shadows. Relentless tries to halt the fighting, but in the heat of the battle no-one listens, and the dwarf is felled. The human archer shouts to the half-orc, whom he calls Longfang, that they cannot win this fight, and the wizard crushes something she was wearing around her neck. A portal opens in the corner of the room, and a figure in purple robes emerges, accompanied by a snarling, green scaled beast.
As the fight continues, Ehljayy is knocked out, and the half-orc and the human archer are killed, but the robed figure and the wizard escape through the portal before it closes. The creature is very tough, but is eventually killed when Capriole strikes it as it runs towards Relentless and Cileth, the last of its energies sapped by Capriole's dark curse.
While Ash tends to Ehljayy's wounds, the others search the level and loot the bodies of their opponents, finding some gold and taking some of their weapons. They also find a letter written in orcish, and an unusual key. Cileth is able to read orcish, and reveals the note is addressed to Longfang, asking his group to recover something lost in the "dragon manor", and signed with a strange symbol which seems familiar to Ehljayy, though he can't place it.
Cileth locates a secret door in the room, which the key opens; inside is what clearly used to be an alchemical laboratory of some kind, though it has been mostly cleared out. At one end of the small secret room is a large wooden box filled with soil, and in the soil are depressions which could have been made by very large eggs – and also signs that small creatures have been here – perhaps kobolds!
The party decides to explore the rest of the underground part of the mansion; Capriole uses his eldritch blasts to clear away the rubble from a collapsed corridor, and they find stairs leading down to a lower level. It too is mostly empty, but they follow the tracks they found earlier through to a chamber filled with webs and a single, giant spider! They fight the spider off, also killing a couple of swarms of its young, hatched early thanks to the disturbance. In the spider's webs they find a dead kobold similar to the tough one they fought in the tunnels under Fallcrest; there's no longer any doubt that the kobolds had been here, and probably fairly recently.
On the far side of the spider's lair they find a natural cave exit; there are signs that some of kobolds passed through here. As the party reach a small underground stream, they are suddenly surprised by a pack of wolves leaping out of the darkness – including an enormous dire wolf!