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Your party will arrive back in Easthaven here. Most of the town is in ruins, the villagers have been imprisoned and cyclopes wander the city as guards. You must free the villagers and find a way into the Crystal Tower.
If you spoke to Jhonen in Easthaven at the beginning of the game and returned his ancestor's blade to him, he will greet you here and offer you the Restored Blade of Aihonen.
3. Winter's Cradle Tavern
Enter the ruined tavern here and go to the back basement where you'll meet Old Jed hiding. He'll tell you about the stockade at area four where Everard and the villagers are imprisoned.
4. Everard & Easthaven's Citizens
Everard and the villagers are being held as prisoners in this small stockade. Kill the cyclopes guarding them, and then speak to Everard and the villagers. Everard will tell you that you can enter the Crystal Tower using a magical symbol. Once you have spoken to Everard and the villagers, return to area one to enter the tower.