You should be able to take out the nests with Fire Sphere, even without disabling the anti-dragon shields.
You can teleport to an outside teleporter on Sentinel Island, to finish off the remaining opponents, and find some loot. You can also now get to the boat in a tree, though you may want to use the item yourself, rather than complete the quest.
They key for the cage is on the beach below. You can mindread one of the soldiers for a clue (that he threw it out the window), but it will be on the beach regardless. The woman in the cage will give you the key for the chest once she is free.
