Story
After rescuing Garlond's comrades, you return to the village, where Chief Pelleir welcomed you warmly, clearly relieved. Hergal tried raising some of his suspicions, but Pelleir seemed to have a poor memory of past events. Everyone will sleep in the village and leave at first light.
After completion (spoilers)
"The villagers... that woman... they were all under the Dragon Lord's control... Shit!" After rescuing Garlond's comrades, you returned to the village, where Chief Pelleir greeted you with visible relief. Hergal voiced his lingering suspicions, but Pelleir seemed unable, or unwilling, to recall any of the recent events. With no immediate signs of danger, the group decided to spend the night in the village and depart at first light. But as darkness fell, the truth was revealed. The villagers turned on you without warning, launching a vicious assault in the dead of night. Chief Pelleir and every villager had been servants of the Balaur all along, their minds ensnared by the Dragon Lord Fafnir. The battle was brief and merciless. Garlond and all of his comrades fell, leaving you as the sole survivor. With no time to mourn, you fled aboard the airship they had left behind. Your escape was short-lived. The airship flew straight into one of the Balaur's concealed self-destruction traps surrounding Ishalgen. Caught in the blast, it lost control and plummeted from the sky. Eventually, you drifted all the way to Altgard.