Here you’ll have your first meeting with a powerful female Red Dragon named Tholapsyx. Like all others of her kind, Tholapsyx lusts for as much treasure as she can get and takes ill any theft from her hoard, the most recent transgression having been committed by the nearby Fire Giants. She proposes an allegiance, to help her kill the Fire Giants and their King, located at the Seat of the Mountain, with the possibility of letting you live.
You now have a number of choices available to you. If you’re set on killing her, the easiest way is to accept her offer and then go to the Seat of the Mountain. Buffed up to the max, meet with the Fire Giant King and accept his offer to kill the dragon. When Tholapsyx shows up, choose to attack her instead of the Giants. Now it’s you and the Giants ganging up on Tholapsyx. There may be a slight drawback to this. You’ll get 1,000 xp for completing the quest of ending Tholapsyx’s life in any event. But there’s also xp to be earned if one of your party members lands the killing blow on her. With this method, there’s the risk that one of the Giants will land that blow.
You can try to attack the Giants. Tholapsyx will then announce her intentions to kill you in your turn. It is possible to talk her out of it with a very high Diplomacy score. If you try this route, bear in mind that in my experience, the Giants won’t do very much to weaken her and it ends up trying to kill her at practically full strength in any event.
You can decide to try killing her now, which is a very dangerous proposition. Tholapsyx will start off with a number of high powered buffs, including considerable resistance to spells and high damage resistance. She also has some devastating powers, including the ability to knock down party members and her fiery breath than can be extremely damaging. If you want to take her down, some buffs are necessary beforehand. If you can manage it, put Energy Immunity: Fire on everybody. For your fighters, put spells like Stoneskin and Regeneration on them. Hit her with spells like Greater Spell Breach right away. Have your fighters pound away, while your spellcasters go to work at a distance. Zhjaeve I found can play a critical role here, both because she can help the party recover with powerful healing spells and because she can nail Tholapsyx with very powerful single-target spells like Harm and Destruction. Once she dies, she’ll leave behind a Red Dragon Hide (which isn’t very useful because you usually need more than one such hide for crafting purposes) and 2 portions of Dragon Blood.
Here you’ll find another Ore Vein.
Here is Tholapsyx’s hoard. If you touch it while she's still alive, she'll immediatly attack you. If you kill her, announce your intention to have Greycloaks retrieve, and then return to Crossroad Keep, Kana will send out men to recover it which means 170,000 for your Keep funds. Among the hoard is a number of chests. Among the booty you’ll likely find valuable crafting gems like Beljurils, King's Tears, Blue Diamonds, Rogue Stones, as well as a Scale Mail +3, a Warhammer +3, a Shield of the Holy, The Waking Dragon, a Book of Fire and a Codex Necromantica.
If you accepted the vision quest from Ivarr the Blessed, assuming that you had Master Veedle build the church in the Crossroad Keep, you’ll find another special chest here. It holds a Loremaster’s Mace if your PC is a good aligned Cleric. It holds the Holy Avenger if your PC is a Paladin.
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