Under advice of the Akaala, they were led west to a small house built into several trees deep in the forest. They were quickly beset upon by the cloaked figures who occupied the house, which appeared to be elven made. Fighting indoors, they incapacitated several fighters and realized the cloaks would use a magic word to disappear from combat when they had lost the ability to fight or when things went south.
They found out the source of the magic was contained within the left arm of all the soldiers, and coult be triggered by speaking the word even if the subject was incapacitated. With this in mind, the continued seiging the house, which they found out was home to an elf.
At the top of the house, they encountered a heavily trapped room and were accosted from within by someone telling them to leave and they would be spared. Breaching the room, they attempted to rescue the captive elf but the cloaked figures were prepared to kill him immediately. In the ensuing fight, the leader of the small band cast several unusual illusion spells, and then departed, leaving his comrades to fight.
The room was full of fog, and the last remaining enemy uttered the comand word to flee, assuming his incapacitated partner would be brought with him. Unbeknowst to him, however, Auro had cut the left arm off the incapacitated soldier. His severed arm disappeared, leaving the body – the first recovered corpse of a yellow cloak by anyone in the forest.
Upon exiting the fog, the group realized the illusory spells were directed at them – They were being framed, forced into the same shimmering yellow cloaks worn by the mysterious assailants. Clie showed up soon after the fighting was finished, and although she seemed intent on slaying the remaining group with her accompanying members of Reingar, some careful talking convinced her they were friendly and that they were being set up.
The house turned out to be that of a member of Reingar, who was slaughtered after being unwilling to give up information to the yellow cloaked figures. Clie and Ellie agreed to travel with the party back to Islandi to inform the Empress of what had happened, and what to do next.