1) Does feign death actually have a purpose and if so, what are some good times to use it?
yes, it's for gareth, the dude in the barracks who longs to go back to his girlfriend, isolde(i think) in farmlands. go talk to him if u haven't.

2) I've collected the three strange items (the dagger, the amulet, and the big sword) now what am i supposed to do with them?
the holy weapons. or something like that. what u can do is to find the entrance to an underground chamber which is located northeast of the church(which itself is north of the haunted abbey, or it south?). u shouldn't touch any of the tombs in there. & place each of the item in the circles(look at the floor). then u get to choose which item that u want to keep. the chosen item will be rendered useful & powerful but random in stats. u may want to save prior to choosing.

3) I've rescued Zandalor and have even gotten the elf to join the council. What's the quickest way to get my teleporter stones back?
solving this quest. get all the seven members of the council together & u'll see the teleporter stones sooner.

hope that helps.

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......a gift from LaFille......