Black Barry produces a glowing rat (provided by Karat some time earlier) from his bag and holds it above his head, calling out to the villagers, "follow the glowing rat - I'll protect you and lead you to the keep." Some of the villagers just run away as fast as they can, but many of them begin to gather around him, including four of the ones with spears.

Elbolin calls out to Black Barry "I'm heading out, good luck," and goes around to the east side of the temple, where he too sees the cultists and kobolds transporting hay bales to build up the fire. But he has an idea, and sneaking around (invisibly) to the far side of the shed, he lights the bales from that side. Soon the shed and hay are engulfed in flames, and it seems his idea was a success; the bales can no longer be used to add to the fire near the temple, and the invaders don't seem to know what to do next.

Bilbo continues to battle the cultist and kobold who are attacking those in the woods, and Elfo uses his Ray of Frost against the fire, knocking it down significantly. Hooflepoof runs down to the riverbank, and emptying his Bag of Holding into his pack, fills it up with water. Its magical powers allow it to hold a very large amount of water, yet weigh very little, but when he gets back to the temple, he finds that Elbolin and Bilbo have been beating the fire with branches that they pulled out of the woods, and the fire on the ground is almost out. With just a small douse from his bag, it is completely extinguished. The fire in the upper floor of the temple, however, still burns brightly, even though Elfo has knocked it back some.

Hooflepoof notices a single door, which had up until now been obscured by smoke, on the south side of the temple, and he attempts to open it but neither his lockpicking skills nor his strength can penetrate it. So he goes around to the main entrance of the temple, bumps into Karat there, and then takes the stairs up to the mezzanine on the east side. There he can't see any fire, but pushing on the wall to the south, he finds that it gives way very easily; there is a hidden door into a passage behind, which is filled with smoke and flames. He swings the Bag of Holding again and again, sloshing the water out onto the fire, and soon it is also put out.

Karat is also exploring the temple. All the villagers have left, either scattering or joining Black Barry's group. She inspects the altar at the front of the temple, but there is nothing there. Anything valuable was already either removed, hidden, or stolen. She also explores the mezzanine on the west side, and finds nothing of interest, so she goes back outside. She can see there still quite a few kobolds and cultists skulking around in the shadows, unsure of what to do now. She is concerned that they might try to relight the temple, so she summons her Thaumaturgy and unleashes a barrage: the earth trembles under their feet, the flames of the bales flash blue and green, and her voice booms out "Stop burning the temple, it is now under my protection!". Having seen all their efforts thwarted by invisible forces, and now this threat, they quickly scatter into the darkness.

Elbolin, Karat, and Black Barry are beginning to lose their invisibility, and have become shimmery figures. Elfo, Nars, and Bilbo are still quite invisible. Elbolin goes back to the forest and gathers everybody up, suggesting they accompany the villagers back to the keep. They surround all those that are gathered around the glowing rat, and make their way through the forest, up the river, and back through the tunnel into the keep, without running into any trouble. In all, they return with 34 villagers.

Elbolin, Bilbo, Hooflepoof, and Gourbain make their way up to the parapet to check in with Governor Nighthill. He is very happy to see them, and relieved that those in the temple are now safe here in the keep. "I'll reward you handsomely if there is anything left of the town's treasure after tonight, but I'm afraid of what damage they've done," he says.

But as they stand watching the town from atop the wall of the keep, Nighthill points out something interesting. Where once the movements of the invaders had been chaotic and aggressive, now their torches seemed to be receding toward the northwest edge of town, where they had been loading up the carts. "I think they're leaving," he says.

The ring of cultists and kobolds that had once surrounded the keep has now dissipated, though a fairly large group is still gathered a couple hundred feet to the north, from this group steps a huge half-dragon. "Defenders of Greenest," he says, "this has been a successful night, and I am feeling generous. Do you see these four pitiful, useless prisoners? We have no need for them, so I will trade them back to you. Send out your best warrior to fight me, and you can have these four in exchange."

His arrogance in lording over such a defeated down is repugnant. His kobolds hold three children and one badly beaten woman. What he is proposing is a one-on-one battle between himself and the best warrior in the town. As soon as they put up a warrior to face him, he says, he will let the children go, but they will hold the woman for security. If there is any magic or treachery, they will slaughter her without mercy. But as long as the fight is fair, no matter who wins, they will let the woman go. "Do you have any real warriors in this town?" he mocks, shaking his greatsword and spear, and then letting loose a breath of lightning 30 feet long, and about 5 feet wide.

Elbolin, Bilbo, Hooflepoof and Gourbain discuss their options. They haven't seen anyone else here who looks like a better warrior than they are, but this half-dragon is a frightening adversary. They decide that Bilbo is probably their best bet, but they will need a good plan if she is to survive this battle.