If you want to go to the wastelands or the counsil, you will first have to rescue zandalor from stomfistcastle.
The teleporterstones are in the counsil, the same imp has them you will find him there somewhere.
The best sword is a point of discussion. I depens on what you find good.
1) Good dam or good stats?
2) one handed or two handed
Most importenly, the stats of the swords are always random!! If you dont lik it--> reload and try again.
About the house... I dondt think you can get those gems. I is the house of madness you know. Al is an illusion.
