The party finished off the last of the ju ju zombies in the fort before leaving and heading back for the town. They first went to the Inn to check that Sholn made his way back safely, which he had. Holissa mentioned they were planning on leaving town in the morning. The party then made their way to the Sleepless building but on their way there they were accosted by a ghostly incorporeal figure of an older woman with strange tentacles and growths on her face. She attacked Krakrox and after she had drained a substantial amount of Krakrox's Charisma, the party managed to fight her off. During the fight, Winter showed up with an Elf you later learned was named Ralen.
They advised you that Ralen had been another Briarstone survivor, that they had apparently had the same dreams of the yellow city and the Tatterman as you had, that they had woken up in a collapsed underground cavern and were eventually rescued by Captain York who had been combing the asylum for other survivors. Connor recalled the staircase the party had gone down which had appeared to lead to nowhere as though the basement that was once there had vanished, or apparently collapsed into a subterranean cavern during the earthquake. It seemed Ralen had also been an employee of Lowls and was suffering a similar bout of amnesia. All they remembered was a connection to the rest of the party that they couldn't explain.
The party then met with Cesadia and informed her of what was going on at Fort Hailcourse. She concluded that the next logical lead to follow up on was Iris Hill. The party agreed and went back to the bunkhouse to rest. Early the next morning Chesna went out to investigate a strange noise and found one of those eerie murals on the back of the bunkhouse. As she went to inspect it, a finely dressed man with a yellow hood and cloak leaped out of the mural and attacked her. As the rest of the party came to investigate, more murals started appearing on various walls around them and several more similarly dressed and armed men and women emerged from the walls to attack the party. They were ultimately defeated as 3 were incapacitated and the 4th ran away and disappeared.
The party debated what to do with them for a while, but ultimately tied them up and brought them in for questioning. Krakrox meanwhile went to the Sleepless agency and spoke with Cesadia who provided him with an elixir of truth. Once they gave that to the cultist, they interrogated him and learned that the current leader of the cult is Melisenn, the count's steward, that the assassin who had been tracking you was named Risi and was either a good friend or perhaps lover of Melisenn, that Melisenn spent a lot of time in the basement of Iris Hill, and that the Star Stelae are involved with the cult's activity. Specifically he mentioned that the Star Stelae were being used to create the murals which allowed teleportation through the town from one mural to another, but the murals have to be within 200 ft of the Stela that created them. You also found that he was a follower of an Outer God called Hastur, sometimes known as the King in Yellow. A being of the Dark Tapestry and that his unholy symbol was a Yellow Sign.
He told the party that he's unclear on the Count's role in all this, but assumed the Count is involved. However the Count has been gone since before this cultist arrived. Finally he told the party that Melisenn had hired the Skum to guard the fort with promises of gold and slaughter, and had hired savage barbarians called Kuru to guard Iris Hill itself. He didn't elaborate on details but alluded to the fact that Melisenn also had contact with a number of extraplanar beings as well, one of whom being Tilsitari (the Soul Sliver shapeshifter you slew in Fort Hailcourse). Seemingly satisfied that he was being forthcoming, you gave him the gold you'd promised and he promptly left.