I'm still stuck. I'm at level 3 with two level 2 party members. I'm not high enough level to defeat any of the mobs in the fort or in the prison and I cannot find any quests or sources of XP at all.
I must be missing something right? Surely they wouldn't design the game this way.
I'm about there too, and I think I can help a bit.
Go to the cell blocks and have your party wait back at the stairs going up into Fort Joy. Take your highest-initiative character and run them to attract the attention of the Magister Houndmaster. Run back to your party, this makes the archers much less of a threat because they have to be on the low ground and pretty close to attack. Meanwhile, any ranged attackers you have can be at the top of the stairs and gain bonus damage. Kill the houndmaster and his allies. Help the wounded magister on the floor, that might give you XP as well.
Take the rubber squeaky ball from the Houndmaster's body and play with the crossbow dogs in the room upstairs for 1400 XP without combat. Then enter the Houndmaster's room and explore and find another large chunk of XP - I forget if it's 1500 or 2500. That should get you reasonably close to level 4, even if not all the way there yet.
Since you're level 3, you can now probably kill the isolated pair of magisters at the gate and the beach near the start to finish gaining a level.
So it probably is possible, but you need to do basically all the content in a specific way. (That's a BAD thing for an RPG which you are supposed to replay several times over.)
