Ashenwood, The Climax
Head for the golden glowing tree in the center of the Ashenwood. There you’ll find Nadaj, who’s glowing somewhat. What has happened is that a Genius Loci, a sentient landscape, has emerged at the expense of the Wood Man and strives to protect the Ashenwood through more hostile and violent methods. Nadaj has apparently been enslaved by the Genius Loci. Battle is inevitable. Nadaj will attack you. The Genius Loci is focused around the large golden tree and three smaller trees. The larger tree can also periodically use a confusion or dominating spell effect on party members. All of the foci can summon Treants, Elder Earth Elementals, and Shambling Mounds without limit So go for them first obviously
Once the battle is concluded, the Wood Man shows up and explains what has happened, and also provides some insight into the nature of your condition. He also reveals that it is the work of a now dead god though he does not know which one. You now have two choices.
One is to devour the Wood Man in his weakened state. If Okku is in your party he will attack you for this action. This shifts your alignment heavily towards evil and gives your PC the Spirit Gorge ability, which gives your Devour Spirit (or Devour Soul) powers an area of effect that can effect multiple creatures. You also obtain the Wood Man’s Essence. If you use Mold Spirit to combine this with the Charred Branch from the Burning Grove you’ll get the Staff of Ashenwood.
The other option is to focus your Spirit Energy to heal the Wood Man with your spirit energy. This shifts your alignment towards good and gives you the Bestow Life Force ability.
Head back to Mulsantir and speak with Sheva. If you consumed the Wood Man the Wychlaran will despise you and make it clear they want nothing to do with you. If you chose to heal the Wood Man then you’ll get 4,000xp and an Amulet of Natural Armor +5 for your troubles.