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With Black Cove cleaned out, you should be around Level 6 or 7. There are a couple more things to do to the northwest and southeast of the city, and then we can deal with the church to the east.
First, return to the cave that had the SparkMaster 5000. If you forget, use the Teleporter Pyramid to go to Cyseal North Gate. Exit out the gate, proceed northeast as much as possible, and look for a river as you wind around the rocks. The river forms from a waterfall that is next to the cave entrance in the northeast edge of the map. Consult the screenshot below if you need a refresher...
Enter the cave. It's empty, but it's time to take the far exit. Trace your way through the cave, climb the narrow hill on the other side, then exit out the cave mouth. This grassy path is generally linear, but it splits near a new Waypoint Portal.
At the Waypoint Portal, go west, which takes you to the lower beach. There, you'll encounter Dietmar. You can trade with him, but once you demand the Staff of Peregon, he'll turn hostile.
Dietmar is not difficult. He doesn't have any special direct skills or unusual weaknesses. However, he has friends, and many of them are invisible when the fight starts. As the fight progresses, more will materialize. Keep your attacks trained on Dietmar as much as possible.
Dietmar will evenutally disappear, usually at about 50% of his health, leaving you to his thugs. When that happens, attack whichever is most convenient; there is no special tactical advantage to taking out any particular target. After a while, Dietmar will reappear, and you should put everything you have into attacking him.
Once he goes down, finish off his comrades, then loot. You'll pick up the Staff of Paragon. Finish looting the beach afterward. Since there is a waypoint close by, we may as well resolve that quest now since you won't lose too much time. Return to Cyseal, then speak to Mayor Cecil. You can then keep the Staff or return it. If you keep it, that's your reward; if you return it, you'll get some reputation. Either way, you'll resolve Cecil's Mighty Staff.
Use the Teleport Pyramid to return to the Cyseal Northwest Waypoint Portal. Go west again, but this time bear north when the road splits so you go to the upper beach. You'll engage a small group of bandits, but they're easy to beat. Head past them, climb the hill, and you'll find a group of four statues that stand around a small plaza.
These are The Talking Statues from the side quest of the same name. You can speak to them, and they'll pretend to give you powers. The top-left statue will do an actual thing; that is, if you agree to “see the future,” you'll see the ending credits roll. Doing this won't confer any rewards, and you'll be brought back to the plaza once it's over (or if you skip it).
Each of the statues has one of the four elements, which you can tell by its color or by mousing over it. You need to attack each of the four statues with a same-element attack, either a spell or a physical attack with a weapon that carries that element. Once the attack happens, a demon of the same element will be spawned in.
It doesn't matter what order you take the statues in, and attacking them one at a time gives you the best chance at success. The demons are weak, as long as you don't try attacking them with their own element. Defeat all four, and a large stone to the north of the plaza will disappear. You can then enter the cave.
The interior of the cave features some loot and a wizard named Bellegar. Speak to him to learn his history, or even barter with him; he's got a lot of money, and you've probably got a bunch of loot to sell. Bellegar doesn't give you any quests, and you cannot speak to his companions.
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You are now completely done with the west and north sides of the Cyseal wilderness. Use the Teleport Pyramid to return to the city. Now we're going to go southeast of the city to finish off a couple more side quests, and then we'll be strong enough to assault the church.
Go the legion headquarters, then head southeast to find another gate. Exit out that gate and you'll be on a bridge. Just past the bridge, the road will fork east and west. Remember this spot, but for now, follow the east fork. Follow this road east as it curves east, then southeast. Keep going and you'll find another Waypoint Portal, though you may have to fight through some undead to reach it.
Once you've got it, follow the road back around to the fork that was after the bridge, then go west instead. Follow this road and you'll come to a courtyard of poison. Use a fire spell or fire arrow to cleanse it, but stay back!
Go through the courtyard; the poison won't come back, even though there are a couple statues spewing it. You'll reach yet another Waypoint Portal. Keep going and follow the road until you come to a building. There is a lot of loot in there, and a lot of traps, so it's up to you if you want to attempt to loot it.
Explore around the building and you'll find a path that leads to gardens behind the building. Look for an open gate, and be sure to save there. Then, go through the gate and head up the stairs to encounter two strong undead mini-bosses.
These two skeletons are pretty strong, and they summon friends. The leader of the skeletons is Diederik, who can do an incredible amount of offense. Worse still, he summons friends who will make your day even worse. Diederik is basically invincible against all status ailments, but he'll summon others if you kill too many of his friends.
There are two basic strategies you can use here, depending on your team setup. If your team is fairly defensive-minded, you should ignore Diederik and instead trace the walls of his little courtyard. Take out his friends there. His friends on the other side will need to waste a turn or two closing the distance, especially if you can lay down some oil. One skeleton mage (called a Court Cryomancer) is on each side, so if you go left, one Cryomancer will likely be your first target. Eliminating him early, then taking out the skeleton archer behind him, will make the battle much easier.
Alternately, if your team is fairly offense-oriented, you can just go for broke and attack Diederik and his companion, Lady Annah, right from the beginning. Lady Annah doesn't have much offense, but she can use heals or debuffs to prolong the fight. It's preferable to attack Diederik first if you're trying for offense, but Lady Annah wouldn't make a bad second choice if she's a more convenient target. Either way, if you choose one, attack only that one until he or she dies. Then, go after the other, and try to ignore the minor enemies until Diederik and Lady Annah go down.
Winning this battle does not affect any quests, but you'll get some great loot from it. Diederik even drops a key that will open up a chest nearby, back down the stairs and to the east side of the garden.
Once you've looted what you can, use the Teleporter Pyramid to return to the Cyseal East Waypoint Portal. (It's a short walk, but you may as well just teleport there to save time.) Immediately walk northeast while following the road. If you're in the right spot, you'll come to wooden planks build into the cliff as they pass a small building. You can see it below.
The door is locked, but you can pick it, break it down, or burn it. Be very careful once you can enter; the instant any character enters, that character will trip a switch that causes a lightning bolt to spawn in the opposite corner. This won't hurt you, but the character standing on the switch is also standing on a puddle, essentially causing that character into being helpless stun locked.
You need to take a different character, one with high strength or high telekinesis, to pick up and move one of the nearby barrels onto the pressure plate in the center of the room to stop the puddle. The lightning will continue, but it will no longer affect you.
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Once you're inside, loot the place. You'll find a locked chest that provides a clue as to the murder and undead situations. Even better, there is an incredibly incriminating letter in the back bookshelves (the ones on the wall near the lever that disables the lightning). You absolutely need to get these items. You can read them to figure out the murderer, as well as update the appropriate side quests. However, you shouldn't do anything with that information for now; it might be tough to survive the resulting fights.
Exit the little room, then go back the way you came. Follow the road when it goes northwest, then turn north when you can. The road will fork east and west. Turn east and follow the road to the end. If you're going the right way, follow the road to the end to find a wishing well. You'll also find the “main” entrance to the church, but it's blocked off with rocks. Instead, speak to the wishing well to learn his story.
Talking to the wishing well will trigger the side quest called The Wishing Brother. Speak to the well again, and he'll teleport you to his brother well, who is in a wintry area. That area only contains a treasure chest and the second well. Loot the chest, then speak to the second well to advance the side quest and teleport back.
From the original wishing well, go straight north to find a barricade. Walk through it, and you'll be in a graveyard. Follow the road and look to the right edge at the first mausoleum just before a poison field. With high Perception, you'll see a pile of dirt in the ground. Dig it up to find a book, and read that to trigger The Legend of the Weresheep side quest.
You've now secured basically everything around Cyseal! You should be up to Level 8 by now, with an excellent handle on game mechanics, plus you're likely carrying a large variety of spells and Skills. Plus, with the gear and other treasure you've received, it's likely you'll have thousands (possibly tens of thousands) of gold, which you can use in the Hall of Heroes to better customize your team if necessary.
The next part of the walkthrough will address the church.
Up Next: Part 5: Assaulting the Church
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Divinity: Original Sin
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