The Malwick Dilemma
Mr. Malwick , the man who gave us that wonderful fireball wand way back on Emerald Island.  You remember our ole buddy don't you?  Well don't say I didn't warn you way back when.  
I asked you to consider if it was really worth making a deal with the devil.  Remember?  Sure ya do you just won't admit it.
Well now is the time to pay the piper. He wants you to snitch a Tapestry from your newly chosen allies. If you do not comply he lets you know in no uncertain terms that he will send his minions to raid not only your Castle but the surrounding lands of Harmondale as well.
Some quest huh? What to do?  Well you could steal the Tapestry and be done with it I suppose.  Your new allies however tend to hold grudges for a very long time.  I'd plan a lengthy vacation well away from them if I were you. Or you could just ignore the whole situation and hope it goes away.
Ha! Ha! Ha! Ha! That was not an idle threat, you don't comply and the whole of Harmondale, including your Castle, will be crawling with his henchmen.  Naturally the townsfolk lock themselves in their homes for fear of their lives.  They won't even open up for you. This includes the skill trainers as well as all the shops!
I guess you'd better hunt down every last mother's son and dispatch them to their reward.  Then the townsfolk will feel safe enough to come out again.
This isn't difficult to accomplish, just a bit time consuming. It can be frustrating. You cannot miss even one individual if you want to conduct business or need to train up a skill.
Not to mention the final archer promotion is located in Harmondale. If you do not have the completed by this time you must either comply with Maliwick's wishes or dipose of every last one of his henchmen.
These guys are like termites and infest every crack and crevise of your castle. Be sure to search it thoroughly on all levels, particularly the dungeon.
 If you elect to steal the Tapestry then Walkthrus are avaiable for Light or Dark path followers.