Quite a small section in terms of map size, but there's a new workshop and a significant chunk of plot involved...
Entering the City Walls South from the forest, Ashley is immediately set upon by Lizardmen. They come in twos or threes, but they're no match for the Dragon-trained spear we're sporting now. There's an opportunity to unlatch a door that leads to the Town Centre West (where Guildenstern and Samantha encountered Sydney) but there's no need to go back there at this time. Heading along the chain of rooms brings us into The Keep. The Keep is a hub for all kinds of extra areas unlockable by various means - sigils, keys, etc. - all of which are optional, and none of which we have access to yet.
We can go into the very beginning of the Iron Maiden and grab a couple of items from a setpiece encounter though...
The Grimoire Exsorcer teaches the Exorcism spell, for undead foes. We can't go any further here so it's back up and onwards through The Keep.
Samantha: Some parts were added later, but the original Kildean letters cover every wall. The walls of Lea Monde, all carved with these glyphs... What do they mean?
Guildenstern: ... These are the "spellsongs". Lea Monde is surrounded by sorcery. You'll likely find them on every den and dovecote in the city. This city... it is unchanged these past 2,000 years. Neither the eroding winds nor the quake have sapped its strength.
Rosencrantz: Didn't everyone? The city is the circle, the "wellspring". And the "book" - the Gran Grimoire - for which you seek... You're standing in it.
Guildenstern: Why did you not tell us? This is betrayal most foul! Why have you done this!?
Guildenstern attempts to use his power against Rosencrantz, but it has no effect.
Rosencrantz: Your memory fails you. The Dark holds no power over me... Nor do I recall us ever being friends. My friendship with the duke is fleeting as well.
Rosencrantz: That, I do have... and enough sense to know not to throw my life away for some fool cause.
Guildenstern: You are naught but a glorified sellsword. You disgust me.
Rosencrantz: We live in peaceful, boring times. There's no rank to be had in killing on the fields of war. We must sieze opportunity where we find it. Do you not agree, Guildenstern? You were using me too, after all. I'm your "opportunity", you know that.
Guildenstern: You are a common harlot. You were born a worm, and you will die a worm. LeSait was right to expel you from the Riskbreakers.
Guildenstern: Where is the "key"?
Rosencrantz: Well, now...
Samantha: Yet I am here!
Guildenstern: Samantha, it is I!
Rosencrantz: ...They are linked. Samantha's rhythm is atuned to his, Guildenstern.
Samantha: H-He is near... He hides.
Guildenstern: It has passed, then.
Guildenstern: We join with Tieger.
Guildenstern and Samantha follow.
There's a Chest Key - locked chest in the courtyard, and a new workshop.
I improved the Short Sword into a Shamshir, upgraded the bronze Ring Mail into a hagane Breastplate and the hagane Ring Sleeve into a hagane Gauntlet, and got a hagane Sallet out of the Spangenhelm and Cabasset. Nothing much to do with the rest of the equipment at this point apart from repairs and discarding the useless stuff. When we get to somewhere that works with silver I can make a more usable phantom weapon than the current staff (I hate the combat timing on the staff).
Ashley exits the workshop and heads for the door the others passed through, but -
Guildenstern: But now it is time to end the game. Rosencrantz, kill him. Show him your power. Show him how you make the Dark kneel.
Rosencrantz: My pleasure.
Rosencrantz: ... We meet again, Ashley.
Ashley: What do you mean?
Rosencrantz: You see, I've known you for a long time.
Rosencrantz: I was the one who set you up as the VKP's errand-boy. And... I have you to thank for my current lack of employ.
Rosencrantz: Here, let me jog your memory!!
Rosencrantz is very fast, and he'll almost exclusively stay out of mélee range and use Break Arts against you. He's invulnerable to spells, both offensive and status-changing. On top of that he can hit you pretty hard with his normal attack. Prostasia on yourself and making a beeline for him is the only worthwhile strategy.
Fortunately when you actually get up to him he turns out to be all mouth and no leggings, and a couple of decent chains will see him off.
Rosencrantz: ...A shame your skill in the killing arts did not go the way of your memory.
Ashley: What "killing arts"?
Rosencrantz: You really don't remember. I should give the VKP more credit...
Ashley: You mean... in the Kingsguard?
Rosencrantz: The "Kingsguard"?
Rosencrantz: All witnesses to our operations must be "dealt" with. It is our code. They were wrong to picnic here. You are the hand of justice. We... we are the hand of justice. It is for the good of the realm. A few sacrifices is nothing-
Ashley: You tell me why these people had to die! Why we had to kill them! They were innocents... Is it not our charge to protect these very souls!?
Rosencrantz: We were always champions of justice, true, but a justice that served the state alone. We were above the law. We assassinated political enemies of Parliament and sent sharp steel to bloody the civil wars of our neighbors. To the people, we were the "Knights of Law and Order". To our enemies, we were the Parliament's hatchet-men.
Rosencrantz: The VKP was not about to lose one of their best without a fight.
Ashley: And you?
Rosencrantz: Myself? I was picked up by the VKP, like you. I learned about Lea Monde when I was sent to spy on Mullenkamp. Then I made some friends...
Ashley: The cardinal's men? Or Mullenkamp?
Rosencrantz: Both. You weren't the only one unhappy with the old killing teams. Threats, burglary, murder. We were no different than common ruffians. They prey on people, we on nations.
Rosencrantz: You know "them", eh? The privileged, ruling from their satin couches. Born with silver spoons in their mouths, or shrewd moneyers standing on the backs of the poor.
Rosencrantz: ... I cannot fathom what his intentions are in using you as a vessel for the Dark. Regardless, his time is nigh.
Ashley: And the Blades will do your dirty work?
Rosencrantz: Those pious fools have been long steeped in filth.
A tremor rocks the city. Rosencrantz uses the distraction to move away from Ashley...