William and Mei-Ling return to the castle, along with Halan Greenbow, who is eager to provide his services to the people who rescued him from the yaoguai.  On arrival, they encounter Bronwen, who is training an owl to hunt on command.  Bronwen notes that she thought an owl might help deal with mice.  William suggests that a cat might be an easier option, but Bronwen is allergic.

The next morning, everyone - except Zook - receives a rude awakening in the form of twn obstreperous gnomes.  This is the Pressimal clan; ten miners and gem cutters who are "cousins of the mighty Zook Farplane" and have come to the castle "to show you tall folk how to work a crystal mine".  Despite the gnomes' attitude (they seem to think that any non-gnome is a servant of "the mighty Zook"), their skills will probably be useful.

William and Eric go to give Zook a not so gentle awakening, only to discover he's already in the company of a young gnomish woman.  This newcomer - who introduces herself as Tula - has unnerving black eyes.  She explains she has been sent by Aranea to 'keep an eye' on Zook.

A few days pass as the group readies for their journey into giantish territory.  Eventually, all is in order and they set out.  The route chosen is through the "taboo" region known as the Hand of the Moon.

It takes a journey of 11 days to reach this area, by which time the group is climbing up toward the snow line.  Late on the 12th day, now several miles into the taboo region, they stumble across the corpses of six ogres, which have been partially consumed by large predators, such as dire wolves or mountain lions.  Borgad identifies these ogres as strangers to the area, probably heading to Cadavag's stronghold to join the war.  Obviously they got lost, entered the forbidden region, and paid the price.

Sleep that night is a cold and dispiriting affair, as the group is serenaded by the howls of wolves.

The next day, as the group presses on, they meet an old face - Melchin, monk of the Waxing Moon.  Melchin is fleeing from two dire wolves, and another man, who is also dressed in the robes of the Waxing Moon order.  The newcomer explains that Melchin is a betrayer and fugitive, who must be taken to the "Master" for judgment.  Melchin, for his part, refuses to discuss why he has betrayed his oaths to the order.  To do so would be a further betrayal, and he says it takes "a great matter" for him to forswear himself.

Melchin's pursuer also says that the group must meet with the Master if they wish to travel in the Order's lands.  The group is points out that they could just kill him (let's hear it for the heroes, everyone!) but his response is simply that they will not survive the journey if they do.  Eventually, with a promise of safe travel to the Order's sanctuary, the group agrees to speak with the Master.  Melchin also returns, as it is clear that the heroes will not protect him from the Order, and his chances of escape seem small.

The Master proves to be a middle-aged elf.  He listens to the heroes' story, and gets their confirmation that they have no particular interest in Melchin's fate.  He offers them a choice;

Option one is to pick a champion to face the order's champion.  A battle of individuals, with no outside interference.  If the heroes' champion wins, he will grant them passage.  If they lose, the group must return the way they came.

Option two is to perform a service for the Order.

The group asks what 'service' he has in mind, and he recounts a tale to them:

• A millenia ago, there were two powerful orders of monks; the Dawning Sun (great warriors) and Waxing Moon (experts in guile).
• Ironically, war destroyed the former, and betrayal the latter
• A demon corrupted several of the elders of the order, destroying it from within.  Eventually, a hero of the order trapped the demon, though he was slain in the process.
• The monastery was abandoned for nearly 1000 years, the few surviving monks going out into the world.
• The Master and his brother, Ji'an, were trained by the descendants of one of these itinerant monks.
• They resolved to restore the order, and returned here with their own followers.
• Unfortunately, they did not know of the demon, and when it appeared to them as a fellow monk, they unwittingly released it.
• It attempted to destroy them from within, as before, but was outwitted by Ji'an.  He discovered what it was, and tricked it into possessing him, which actually made it weaker, and they were able to force it back into the ancient trap.
• Destroying the demon would be a great service to the Order.  "Of course, it is a terrible adversary, and probably beyond your abilities".
• The demon is resistant to blows, and has powerful magical abilities – it can unleash the raw power of chaos on its enemies, pierce any illusion, and lift its foes helplessly into the air.

The group accept the task to kill the demon - provided they are allowed a night's rest to prepare.  The Master agrees, then offers Melchin a pardon if he also battle the creature.  Melchin accepts.

The next morning, the group enters the ancient trap.  The demon attempts to persuade them that it is the real Master, and that the elf outside is the one possessed by a demon, but Lady Talbalt is able to sense the creature's evil, and battle is joined.

The fight is fairly difficult, as the demon-possessed monk is joined by two unnatural-looking dire wolves.  Zabrit is quickly knocked unconscious while the group finds their preparations for the demon itself are not as effective against the creature's host body - especially when the host proves to be a lycanthrope!  Eventually, however, they manage to drive the demon out of the monk.

Unfortunately, that just means they have the actual demon to face ... and it seems the two dire wolves were also possessed by (lesser) demons, which also now join the fray ...