I tried the all good and all evil paths in the morals cave, but wasn't impressed with the loot at the end. There wasn't a huge difference in loot for the individual choices, either, so I went good for the first choice, then evil when good would have required making a relatively insignificant sacrifice (first one stat point [random], and then two [Vitality and Spirit]).

The 'Mister' items are associated with the hermit on Sentinel Island.