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Ged wakes up in a strange tower, worn out, and without his staff or his otak. His hostess comes in when he's awake and welcomes him as an old friend, even though he doesn't recognize her. (Any guesses as to who she is?)
Her name is Serret, and she speaks with a Gontish accent. She's married to Benderesk, the (old and cranky) lord of the Terrenon.
So Ged luckily ran exactly where he was trying to go in the first place. And, luckily, the shadow can't come into their castle because they have powerful magic. Even better.
But Ged isn't happy because it's always cold and he thinks he failed when he ran away from the shadow.
However, Serret continues making nice and Ged starts to relax. He's so relaxed and so friendly with Serret that she shows him their secret: they have a magic stone named Terrenon that's very powerful and not at all evil (she says).
Ged is uncomfortable with the stone, even though Serret keeps telling him that it's not evil and can help him defeat the shadow. She also admits that the guy who met Ged on Orrimy was actually sent by her. (Which is like, hey, yeah, I totally lied about that sword, but here's a stone – so, we're even, right?)
Serret tries to convince Ged that the Terrenon isn't evil, that Ged needs the power of darkness to defeat the shadow, and that they can rule the world with the power of the Terrenon. Which kind of ruins the whole "it's not evil" argument she was making.
Ged argues that only light can defeat the shadow.
He also realizes that Serret and Benderesk were both conspiring against him. And Serret was conspiring against Benderesk. And now Benderesk is going to kill both of them. It's like the worst series of realizations ever.
Ged and Serret escape the court. And Serret is revealed as the daughter of the lord of Re Albi, whom he tried to impress all those years ago (7.72).
Also – and this part kills us – Ged finds the dead body of Hoeg, his otak. (Was that really necessary? Sigh.)
Now, Benderesk summons monsters called the Servants of the Stone to kill Serret and Ged before they escape (and, as usual in fantasy novels, if it starts with capital letters, you know it's important or powerful, so let's hope they don't get caught by those Servants).
Serret turns into a gull and tries to fly away. But Ged is too angry after losing his otak, so he stays and fights. (OK, fine, we guess that's why the otak had to die. Plot development.)
The Servants catch and kill Serret in gull form, but Ged flies away in the form of a falcon.
Back on Gont, Ogion finds an exhausted falcon that Ogion recognizes as Ged. Ogion turns Ged back into a human and helps him recover.
See, Ged had spent too long as a falcon and had forgotten what it was to be a person ,which is evidently a common problem with mages who take on other shapes. (We get to hear some stories about that here.)
Ogion notes that a) Ged is strong enough to beat magicians and dragons and evil stones, so he can probably beat a shadow; and b) it's weird that the shadow knew Ged's name.
Ogion gives Ged some advice: Ged has to stop being the hunted and start being the hunter since he's the only one who can defeat the shadow. A self-help book from today might say something about being proactive and facing your fear.
Ogion also says that Ged has to connect with his roots, which really sounds like a self-help book too.
So, after Ogion makes him a new wizard staff, Ged goes hunting for the shadow.