Yet another Optional Chapter. After speaking to the knight pacing the second floor, head to the courtyard and down to the Underground Depths, approach the gate where two knights are standing, talk to them and Zael will learn that when the island started to move, some sea monsters got onto it and a scouting team was sent to check out the situation, but haven't returned yet.
Make a choice as to whether or not Zael will go on the rescue mission.
The party will comprise of Zael, Dagran, Syrenne, Mirania, and Lowell. You will return to a very familiar area (the ruins in Chapter 1 where Zael learned Gathering). Grab the chest near a pillar, then move down the corridor and open the door on the left. The area however will have changed considerably. Look to your right and spot some lizards firing arrows at the party. Dagran will have the party split up, so Zael will have to start climbing across the cliff face. Watch out for falling rocks. Lowell and Mirania will go with Zael. Climb into the holes that the lizards came
from, leaving Zael alone (for now).
Once inside, continue further into the cavern, and fight four lizards. Grab the chest, the go into the hole in the wall the lizards came from. Zael will emerge at the bridge (from Chapter 1) that Yurick had blown up. Don't jump down, but instead shoot the torches to attack the lizards as they greatly outnumber Zael. Shoot the torches to take out the groups of lizards. Zael will spot two of the knights near the far left pillar.
If you feel particularly daring, jump off the bridge and attack the lizards.
Talk to the knights once the lizards have been wiped out.
Lowell will reunite with Zael afterward. There is a chest near the area Lowell just came down from, as well as one right in front of the door to the next area. Head up the stairs and kick open the wall to the next room. Another battle starts, Lowell will head to the right, leaving the front
lines to Zael. Once the lizards have been defeated, the party will hear Mirania scream. You will see her being chased by some lizards, so defeat them. Afterward, Sea Lizards will climb out of the water and attack the party. Be careful as they can spit sticky fluid to slow down the party. They are weak to magic (just not Ice), so have Mirania cast spells to weaken them. Once the Sea Lizards have been defeated, Seek the area left to where Mirania and Lowell are standing to find a wall of interest, the next entrance is the door to the right.
Before heading there, go down the path where Mirania came from to find a treasure chest with a Light of the Outsider. Check the wall to the left, and grab the treasure (Ogre Nail) nearby. The wall will open up, and the party will reunite with Dagran and Syrenne. In this room there are two treasure chests near the back. Now that the whole gang is back together, head to the door.
There are two chests near the stairs. Go downstairs to find a save point. As the party approaches the next set of stairs, lizards will drop down on them. Shake the control stick to get rid of them. One at the bottom, don't jump off the current ledge until the treasure chest near the edge has been opened. Jump down and be attacked by more lizards. You can choose to fight more lizards (right choice), or move on (left choice). Head towards the water for the next cut-scene with a knight and a giant octopus.
Attack all the tentacles, and don't get caught by them. One the tentacles have been sliced off, the head will pop up and fire a beam at the ceiling of the cave. Use the fallen rock to perform a Dunk Slash on Kraken for massive damage. Getting hit by the ceiling however will cause YOU massive damage. Repeat this until the Kraken is very dead. Simply attacking Kraken while it's head is out is bad, as it casts a damage circle around it and lowers Zael's health to <10%.
The party will find the Grand Swell sword, and the last knight will pop out of the water, safe-ish. The rescue mission is a success.
Head back to Chapter 23 if you haven't done it yet.