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The Thrall at the bar in Skulldoon says there is a treasure room in Talendor with spell books and other treasures. I've searched in and out and even on top of the building but havent found anything. I even tried the rune signs that are on the wall inside Talendor by inputting them into the Moon Bridge in the order they appear but nothing. Is this just a rumor or is there any truth to what he says?

There might have originally been something like that intended in the game, but like so many other things, it was never actually programmed into the game. Notice on the map there's a yellow dot for each of the two statue murals in the relic room, not to mention all the yellow dots in fargrove and elsewhere for doors that can't be opened.