In the aftermath of the previous battle, the party decides that they need to find a way north for the Expedition to travel that doesn’t lead right into large bands of evil creatures. Mako and Liath both decide to scout to the North: Mako goes up the shore of the lake while Liath follows the trail left by Yark’s Boys to the northeast. This old road eventually leads to the ruins of what was once a stone circle, near some rock formations and a small frozen lake. The Ogres had apparently left some kind of tribute there, including some treasure and a carcass. Eventually Liath spots Old Greyfang, a decrepit and half crippled while dragon with terrible scars. The tribute is apparently left for him. Mako finds that the north end of the lake devolves into a morass of swamp, and amid the mud lie the rotting hulks of old ships.
While those two scout ahead, a new Party member emerges from the woods – Mio Jo-Joli, the descendant of the Storm Elves of Tor Embric. Having heard about the expedition in New Delos, she has made her way upriver and has been shadowing the party for some time. The new arrival isn’t well trusted by the human members of the expedition, and some nascent friction between Mio and Iolar begins to develop.
The party opts to avoid the dragon and try instead to find a way through the swamp. There are unquiet spirits there, though – undead sailors rise up to defend their ships, and eventually the party becomes involved in a confused, ghostly re-enactment as they battle the Ghost of a dragon that appears on the scene. Another mercenary is killed in the fracas.
Eventually, the spirits are temporarily put to rest. A few small treasures are found among the boats, and the party moves to the north side of the swamp.