Upon entering the town, your party finds it odd that the place is pretty quiet - almost too quiet. That’s very strange, indeed. When you get control again, head northwest to find a fishing sign and as you approach it, your party notices the weird color of the water. Despite that, you can still actually fish in the river, so do that if you wish. When you’re finished, continue west to find the shops. There are new weapons available for your characters, as well as the Exotic Vest, which you found one of recently. There is also a new upgrade spritnite available for sale, which makes upgrading weapons/armor even more expensive (a total of 11,500G for each piece of equipment).
Other than equipment, don’t forget to look at the new spritnite available from the Magic Consortium. At this point, you might have reached level 30+, which is when the next skill slot unlocks (level 30, then 40). You should have some new skills, like Sonic Rain for Sherra, but the biggest draw will be the Momentum Spritnite. Love Axiom is like Life Axiom, but it heals the entire party, which is a great thing to have in a pinch or on a skill you use a lot. Power Wave allows you to refill some ATB after using a skill, meaning you can get to act again. Look through the rest to find a bunch of other buffs, like raising physical/magic attack/defense.
Once you’re finished, it’s time to explore the rest of the town and find out what is going on here. Head across the bridge, leading north, but don’t go inside just yet, as there’s a chest on the side that requires you to go around the right side (2 M Potions). Go inside the inn now and speak with the innkeeper to learn that the town was struck by a strange illness, as evidenced by all of the people laying about and coughing. Some more scenes will happen, then Lumina will leave the party temporarily to watch over Galdra, while you scout out the rest of the village.
Start off by heading west of the inn and into the house northwest of it. Speak with the man inside and you’ll hear of some spirit cure, but the man can’t make any because the holy cave where it grows has become a den of monsters. Keep going around this way until you spot a house in the north, so enter that one. The old man inside is the elder of the village and he will speak about how this is all a punishment from heaven. Hmm, Sherra seems to know something about the man who swindled the elder. After talking to the old man, inspect the sparkle on the bookshelf to create a memory, which turns out to be the Prognostic artifact knowledge.
Following the northern perimeter, you will arrive at another house in the northeast, so go into it and speak with the woman there. It seems that the empire is at fault, largely, for dumping their waste in the village. When you’re finished, open the chest in the corner of the house for 2 Phoenix Tears, then inspect the sparkle for another artifact knowledge (Library). Next up is the guy on the ground next to the innkeeper, who mentions that the river water comes from the Holy Cave. If you do Party Chat and they don’t mention to go back to the inn, then you may need to revisit the doctor’s house and speak with the child there.
Otherwise, return to the inn after exiting it again, then approach Galdra, who should start talking. He mentions a few things, then goes on to say that Lumina is worried about something. So, worried that Lumina is alone and that the party’s pursuers are still out there, Kanata decides to go alone to find her. In the northeast section of town, there is an exit, which leads to a cliff with a view of the moon. Some more scenes will play out, with an interesting development, then it’s time to set off for the Holy Cave.