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Finding the Helm of Balduran:

Following the clues in Vail's note, head over to the Helm and Cloak Inn. Once inside, go toward the back stairwell (near the kitchen) and go up. Head all the way to the far end of the room and check the painting on the wall - careful, it's trapped!

I found this by accident the first time - and then when I thought about it, it was pretty fitting, that a helm to be found it the "Helm and cloack inn"

I remember turning that place upside down for the cloack after finding the helm