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Background
You'll receive this quest from Mayor Cecil in the
Cyseal City town hall (#1).
Walkthrough
Cecil will tell you that he purchased the powerful
Staff of Pergamon from the merchant Conrad in the harbor (#2), but that the staff went missing before Conrad could have it delivered. When you ask Conrad about the staff, he won't have any idea about where it went, but he'll suggest that you talk to his crew to see if they know anything about it.
On the dock nearby you'll meet Marv. He'll tell you that he saw a certain Dietmar running off the ship with a package during the orc attack. Learning this will earn you 90 xp. When you tell Conrad about Dietmar, he'll call the man a "weasel," and he'll speculate that he might have fled to some "out-of-sight beach somewhere." This conversation will earn you 100 xp.
You'll eventually run into Dietmar in
Cyseal North (#3). When you approach him, he and the two thugs with him will attack you. Then during the fight, four more thugs will show up, so if you have a good area-effect spell, don't waste it in the first round. Save it for when the reinforcements arrive. You'll earn around 7000 xp for defeating Dietmar and his thugs, and Dietmar will drop the
Staff of Pergamon when he dies. When you pick up the staff, you'll receive 500 xp.
Back at Cecil, you'll have to decide if you want to give up the staff or not. This will give you a choice between being Spiritual (immunity to fear) or Materialistic (loremaster +1). If you give the staff to Cecil then you'll gain a point of reputation. If you keep it then you'll lose a point of reputation. Either way, you'll also earn 4500 xp.
1 - Town Hall
2 - Conrad
3 - Dietmar