You need to turn Amdusias human in order to defeat him. He can not be attacked in dragon form. Explore everywhere else there, and he may not be as agressive the next time you enter the room (in D2:ED he attacked me the first time I went in, but the next time he was circling around off to one side, and ignored me).
The librarian is looking for a book (that can be found on that level)...
hint
The book in question contains various transformation spells, one of which Amdusias used to become a dragon. When you bring the librarian this book, he will give you the second volume, which contains the counter-spells. Reading that book from your inventory (wherever you are) will cast the counter-spell, as long as you have the required ingredients.
or in a bit more detail
The book can be found in the chamber with the bedrooms upstairs...
[spoiler]The book is in a locked chest downstairs, while the key is in the secret room upstairs - to access this room use a book in the bookcase in one of the bedrooms.
The ingredients can be found near the key to the chest, and in the room with Amdusias...
The vial of blood is in the secret room, and looks a bit like a candle at first glance. The scales are on the ground on the path to the blood alter.
[/spoiler]
BTW when you finish off Amdusias you will get access to Sentinel Island. Your first encounter there you can mindread to go up a level, so the higher level you are (in D2:ED I made it to level 18 in the fjords) the more of an experience bonus that will be. You don't need to get to a high level, but it would be better if you got to a new level before entering, to get a full level bonus.
