The various party members were at the Commonwealth Palace (formerly the Royal Palace) in Arcol City. Vana and Oswyn were waiting for their peoples’ respective delegations to either begin the journey home or send them back, Jack had found gainful employment as a guard, and Vaclav and Scabbard once again found themselves embroiled in Barthory family politics.
Specifically, their mother and father had arranged a diplomatic coup: the ambassador of Zentania would be arriving the next day and on the agenda was the renegotiation of the Peace of Manfred, in which the Zetans would be asked (in return for unspecified questions) to allow the gouging reparations payments agreed by Manfred to slide. Part of the negotiation process would involve both parties swearing to the new treaty on the Egg of Peace, a relic of the Kindly Messenger that His sacred church had provided for this purpose and which is reputed to give benefits to nations who swear a peace by it and keep the peace subsequently.
General Danicia, Scabbard and Vaclav’s eldest sister, had cajoled the pair into helping out with its security, but as she and they arrived at the chamber the Egg was being kept in (meeting Jack, Oswyn and Vana, who were chatting outside) a thump was heard from within. Opening the door, Danicia took a faceful of some noxious gas which had evidently been used to knock out the paladins who had been guarding the room, allowing unknown assailants to enter, slay them, and steal the Egg.
Luckily, the closing of the secret door the killers had entered through had been botched. As Danicia ran to have the palace sealed and grab some reinforcements, the party levered the door open and descended down the staircase thus revealed, entering a long-forgotten dungeon that seemed to have been constructed in the days of Lorok I, II or III, or maybe Queen Chand. They soon found danger within, uncovering not only a pile of gunpowder barrels which had been primed to blow up the Palace, but a small horde of kobolds lying in ambush. Capturing one and slaying the others, they attempted to force their prisoner to tell them where the egg was, and despite an early attempt to deceive them the prisoner seems to have learned to co-operate.