After rescuing Mary and helping a suspicous guy get arrested, you continue on to KernSin.
Explore
As you continue along the path to KernSin, you will overhear some Cast knights saying that they are going to raid the town, but they will make sure the goblins are blamed by sending a bowman to talk to them.
Go north from this screen to find a treasure chest partly concealed behind a tree. It contains 200 gold. There is another chest containing 200 gold on the beach south of Kernsin. There are numerous power ups that you can access in this area as well. Check the list of power-up locations.
Stop the Cast's Plot
When you are ready, go into Kernsin and talk to the girl by the fountain in the middle. Tell her about the planned assault. Then follow her and go into the bookstore. Talk to the guy in green. You need proof before the mayor can call in the guards.
Get a Bow and Boots
The Cast said that they would send a bowman to the goblin sanctuary, so you must buy a bow and arrows and pretend to be the bowman. For this, you need to have 1000 coins. You can buy it in the building west of the fountain. Go around killing Boncas and other high-level enemies until you have enough money.
You should also purchase the Hyper Boots (a.k.a. the Herb Boots) if you haven't already. They cost 500 coins, and you can find them by going south from Martridge's hut, then burning the trees on the right side of the screen and going east to a new area. The guy in the cabin will sell you the boots.
Go to the Goblin Sanctuary
Once you have purchased the bow, equip it and walk to the goblin sanctuary south of Kernsin. Talk to the guard. He will open the gate for you since you have a bow.
Be sure not to touch any goblins, because you will take damage if you do. Go to the northeast corner of the goblin sanctuary, where you will find four attack potions. Now go west one screen kill all the guards. I recommend using the Hyper Boots. Try to get the goblins to attack each other so you have fewer guards to fight. The Acid Rain spell can be helpful for inflicting repeated damage as the goblins slowly walk through it.
Once you kill all the goblins in the northwest screen, the leader, Mog, will come out and attack you. Kill him, and he will tell you where the secret Cast camp is. Dink will go in and get a scroll from the hut, but the Cast will chase after him. Fight the three Cast knights. Get them to walk close to each other, then get close to them so that they swing their weapons. They will hit each other. Do further damage with your weapons. They are immune to magic.
When the knights are all dead, go south to Kernsin, save your game east of town (there is a possible bug in the next part, so you don't want to have to defeat the goblins and Cast knights all over again), then show the scroll to the girl by the fountain. Then go to the book store and show the scroll to the green guy.
The parade will take place and everyone will be happy. Now, the bridge east of Terris is fixed, so you can go visit Windemere.