You have to get out of Iona's dungeon first, then go rescue Zandalor.
When I got kicked out of the castle the first time, I reloaded, collected all my loot, put everything I didn't need in a chest, and tossed it out the front gate. That way I didn't have to search around to get my original equipment back in place, and I had more weight capacity so I could collect more loot (I still had to drop some off in a barrel in the dungeon, though, and mark it on the map to get later).
