I have the 3 talismans [ east west south ] and I have had them for a very long time but have never come across the side quest for this. I have my battle tower and I dont know if I can still do that quest or if it's too late now.
Also, is there a quest to do to get through the champions gate? [ where Morgan is ]
Iv'e done just about everything except those 2 quests.
You need to use the 3 talismans in the correct order at a statue in the derelict tunnels where you found them, in the central region. There was a book there mentioning a statue, but not the location. You get the talisman of the north after that (and other random stuff in the chest that appears), which IIRC has +2 Wisdom, 3 enchantment slots and a couple other random bonuses.
But after you have your Battle Tower, Brocken Valley is poisonous now and you CAN'T go in that Delerict Tunnels!! Sadly, this side quest is now impossible to solve!
The Champions gate, no, you can't go in there (for so far I kwow) ... also sadly
On 7th of february 2015 : I start a new adventure in the Divinity world of Original Sin, it's a Fantastic Freaking Fabulous Funny ... it's my All Time Favorite One !