Well, at least you don’t have to fight any monsters in the town. However, the townspeople will push you out of town should you try to enter, despite the fact King Edgar himself is with you. Well, the Empire is on their way, so let’s just let them drown in their own blood… What? We can’t do that? Crap.
Well, you remember that secret entrance Locke took you out of at the beginning? Go as far south as possible without entering the overworld and head west to find it. Examine the northern alcove to open it up.