Here's what to do;
Mindread the goblin in the library for "Goblins Novel" or something then speak to the talking bookshelf and select the very bottom one (the one you mindread from the goblin) and the wall will open with a chest inside, open the chest for a book and it contains the name of the demon.
The second pile of rocks is on your right when you blow up the first path, check your map and it should be more visible.
