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DRYAD FALLS
Ludrug
From Beregost I travel to the area southwest of Nashkel, the Dryad Falls. I start off at the east edge.
I then travel northwest, and end up killing pairs of Cave Bears with standard methods.
I continue northwest and run into a pack of Gnolls. Their leader, Ludrug, demands tribute. I refuse naturally. Sleep suffices to win this battle.
Dryad of the Cloudpeaks
Now I continue south and run into the Dryad of the Cloudpeaks. She wants me to save a nearby tree from a pair of dimwits, Caldo and Krumm. If you want to take a reputation hit, you can side with Caldo and Krumm instead. They'll bail on you, leaving you to kill the Dryad by herself. There isn't any treasure in the tree by the way.
The good party naturally tries to talk Caldo and Krumm out of what they're doing, and then they attack. At this point they aren't difficult, although spells like Command Word: Sleep can't hurt. I speak to the Dryad again for 500xp, +1 to reputation, and an Antidote.
Krumm leaves behind a cursed +2 Katana (not worth it and courtesy of the BG1 NPC Projects mod) and the Girdle of Bluntness (+3 to armor class vs. blunt weapons) which Yeslick wears for the rest of the game.
Dire Wolf Cave
The party continues south, and kill a Dire Wolf standing at the entrance of a cave. They then enter the cave and kill another Dire Wolf.
A crate in the cave has a random necklace, and a Halberd +1 for anyone who's interested.
Drienne and Pixie
Now I curl around the edge of the waterfall to the south, and continue in a northwest direction. I then kill off a bunch of Gnolls routinely.
I then go east along a narrow path that leads to the top of a waterfall. A little girl named Drienne wants me to find her cat, Pixie, that fell off the edge of the waterfall.
I go back to the bottom of the waterfall, and click on the waterfall itself to get a Dead Cat in my inventory. I then break the bad news to Drienne, and get 200xp for it.
Ingot
Now the party continues northwest, and run into a pair of Winter Wolves. Winter Wolves can inflict significant damage if their cold breath attacks connect. Keep in mind that these attacks are treated as missile weapons, so a character with high armor class against missile weapons can often safely absorb the initial fire. They also leave behind Winter Wolf Pelts that can be sold for gold.
The party continues northwest and then runs into a rather obnoxious Gnoll named Ingot. It goes without saying I kill him.
The way to the Gnoll Stronghold lies at the center of the western edge of the area.