After you get to Sentinel Island you can still return to Broken Valley. There is a 'point of no return' just before you get the battle tower, but there is a warning from Talana before then.
There is nothing special in the room that can be unlocked if you mindread Ragnar to get the key. The chest and a couple barrels there have lowish level random loot, though you can find Ragnar's diary there (which doesn't say much that you don't know from previous books or conversations).
I'd recommend at least going up a level before heading to the island, and/or clearing down to the teleporter shrine in the fjords. I was level 15 when I finished Maxos temple, but only needed 3k experience to level, so after realizing the mindread at the start of the island was essentially wasted, I reloaded and headed to the fjords. The first couple opponents brought me up to level 16, and working my way down the path brought me to level 17. I used a bow to start combat, at least (didn't invest in any ranger skills, so wasn't terribly effective), then switched to melee to finish them off, occasionally having to retreat to heal. Swimming over to another couple beaches almost brought me up to level 18, but for the last 4k experience there were only level 21 imps left. After multiple attempts to take out a couple imps, I found my creature was much more effective with a level 2 ranger head (Fireball) than a level 6 warrior head (Rush Attack / Fatality), and had a much easier time reaching level 18. After getting the battle tower I switched to a mage head (Magic Missile).