Our quintet stops by Hodam en route to their ship, The Eve of Destruction, which they will use to travel to Bloodpurse Isle and the neighboring Merman City, so that they might stop Seldak from wreaking havok there. In town, Irving and Jarmangle consult a private detective, Vernjack, to try and dig up some dirt on Tralamin. It turns out Tralamin is wanted by the eladrin, and is considered to be a notorious criminal. Unaware of this, Tralamin talks with Melany and establishes a formal business partnership, giving both of them shared ownership of the brewery, as well as all the inns, pubs, and brothels in town. Hearing that they'll be travelling to Bloodpurse Isle, Melany suggests they try to firm up a trade agreement with Jarmangle's father, Captain Bergris.
They sail down the river, and as their ship approaches Bloodpurse Isle, they rescue a young merman. He is the Prince of the Merman City, and he is fleeing for his life; his parents have already been murdered by Seldak. They head to Bergris's palace, hoping he'll provide much needed aid, in keeping with his treaty with the mermen.
Bergris is not alone; Seldak is with him, and the pirate lord has agreed not to interfere, acting he feels in the best interest of his island. The discussion that follows soon leads to blows; Seldak animates the owlbear rug that Tralamin has been wearing and manages to escape. Bergris crosses swords with his son but lets him live; he warns them not to interfere, or else the trade agreement between Bloodpurse and Hodam will be forfeit. He also intimates that Tyne's life will be in danger.
But our heroes have no intention of being cowed. They agree to help the merman prince reclaim his kingdom, and he mentions a strange "metal whale" that a surface-man once used to visit them. The whale is kept in a small pond deep within the Gnollish Woods.
They sail up to the mouth of the woods in their ship, and then travel on foot. Jarmangle finds some berries and feeds them to his dire falcon; the falcon nearly dies, for they are poisonous. Feer saves it, but Jarmangle-- for reasons never quite made clear-- kills it with his sword. He tosses it in the air, and Irving sets it on fire.
They find the metal whale, and use it to travel to the Merman City. Wanting to avoid a direct confrontation, they bake some of the poisonous berries into a Merman delicacy, and send Tralamin to present it to Seldak as a peace offering. Seldak is suspicious, and Tralamin basically admits that it is a transparent attempt to poison him.
Seldak suggests that Tralamin join forces with him, and gives the eladrin an explosive device to take back to his friends. Tralamin takes the bomb back to the metal whale, and then tells his friends precisely what happened. They jettison the explosive, and engage Seldak in a final, climactic battle. Jarmangle nearly perishes from the crushing water pressure, but our heroes manage to triumph, ending Seldak's reign of terror and restoring the Merman Prince to the throne.
Our heroes discover that Bergris has destroyed The Eve of Destruction, and that Tyne has escaped his clutches, heading to the Dark Spire on the nearby penninsula-- the last place where Tallybrooke was seen alive. The group agrees to join her on her exploration of the bizarre tower.