When you first come across those gems you should have seen a brief cut scene that showed one turning into a fire elemental. I'm not sure what the trick is but as I wandered around with them in my inventory they eventually do just that, turn into fire elementals...perhaps when I walked close to the flames from the ground this triggers the change? Anyway, that accounts for them 'disappering' from your inventory.
Excellent. It looks like that cutscene was to short for me to figure out. Anyway, it is a great explanation. I think it might only work around the fires where you find the gems though as I dropped one by a different flame area and nothing happened nor have any disappeared from my inventory in a long time now--still have 4 left. Maybe I'll go back to the original area and see if I can kill-off the last of 'em. <img src="/ubbthreads/images/graemlins/ROFL.gif" alt="" />