Your party can undertake this quest after Eolanda has reassembled Arinth's Legendary Staff. For Mercenary mode, ensure that you have a character at or above character level 28 and combat level 23, so that the staff can be equipped.

Teleport from Eirulan to the Lost Valley of the Azunites. Follow the path east from the teleporter until they come to a campfire near some ruins, where an elevator is just to the left of the campfire. The switch for the elevator is hidden on the north wall of the ruins. Activate the switch and ride the elevator down into Some Lost Elven Ruins. Open the door on the north side of the room and enter the next room and search for a hidden switch on the north wall. Activate it to open a door to the south. There's another hidden switch on the wall near the door in the newly revealed room. Activate it to open another room to the south. Enter and activate the hidden switch in here, which is also near the door to open a room to the east. Locate the hidden switch in this room, which is along the south wall. Activate it and you'll now be able to go down the circular stairway to the east, battling a bunch of annoying Skitters on the way down, and eventually arriving at the door at the bottom of the stairs. Open it and proceed on into An Elven Prison, where your party will find Arinth the Mad in a cell at the back of the prison. Have your combat mage equip Arinth's Staff and use it to break the central enchanted pillar between Arinth's two cell doors. Arinth will gloat at being freed and flee to The Temple of Istauru and Isteru, which is in the Northern Vai'lutra Forest, just before the Elen'lu Isles.

Teleport back to Eirulan, then to Aman'lu, and finally to the Elen'lu Isles, where you'll see a white slowly flashing star on your small compass map, indicating Arinth's location. Follow the path a short distance to the east and Arinth will be visible within the temple as you approach the western arch of the temple. Enter the ruined temple and they'll encounter Arinth and engage him in battle.

He's vulnerable to normal attacks, so your mage doesn't have to use his staff against him. Each of your active characters receives a bonus of two skill points for defeating Arinth. Return to Aman'lu and head east down the ramp and across the path to the Pet Shop. Head northeast toward the house in the mist. Enter and speak to Eolanda and your lead character will tell her they killed Arinth. Eolanda is impressed although she calls them foolhardy for ignoring her warnings, then gives them their reward of useful items and gold, thus completing this quest.