I spent too much time reloading to get something good out of certain chests (ie if I had to mindread to find it, or if it was difficult to get to, etc). Several times I ended up getting something better in a random drop a little while later anyway. I mostly stopped doing this after getting the battle tower, especially since you tend to get better loot if the game has not been loaded in awhile.
The human that thinks he is a goblin is just past the entrance in High Hall. Tell him to go to the goblin cave, and when you get there the storyteller will open the door.
The cave itself is across the water south of the entrance to Keara's flying fortress, near the Red Hammer teleporter shrine.
