To no one's surprise, the goblin isn't friendly.

It's a boss fight. Mud-Eater L (Blue Beast) is immune to Water attacks and weak against Fire, while Mud-Eater R (Red Beast) is immune to Fire and weak against Water. Both have normal magic defense and slightly elevated physical defense. The Mud-Eater Tamer (Mud Imp) doesn't attack directly, but instead bosses the Mud-Eaters around. All attacks against them are counterattacked somehow, depending on the situation and the target of the attack.

If either Mud-Eater dies, the tamer starts healing itself and any remaining Mud-Eaters for 150 HP each whenever it's hit. The tamer has high magic defense and extreme physical defense, so killing it at this point is impractical, and it eventually runs away when alone anyway. However, it does appear to lose a significant amount of physical defense at some point after both its minions are down, so relatively powerful combo attacks may be enough to take it out.

The easiest way to finish the battle is to bring Marle and Lucca and use Ice Sword and Fire Sword with Crono to take out the Mud-Eaters quickly, then just sit there and laugh at the tamer until it runs away. However, Ayla can steal a Speed Capsule from the Mud-Eater Tamer, an Elixir from Mud-Eater R, and a Mermaid Helmet (not found anywhere else) from Mud-Eater L.

It's also possible (though more difficult) to win by taking out the tamer. If you want to attempt this, favor magic, since its magic defense is only moderately high, and leave both Mud-Eaters alive so it won't heal after every hit (though you'll have to deal with an earthquake counter).

The chain leads up to a mountain that floats in midair...

After beating the Mud-Eater tamer, no more Mud-Eaters will appear in the cave.

Visibility is low, monsters tend to show up out of nowhere, and wind noises replace the music. More chains connect different sections of the mountain.

Monsters here include the Monk Gargoyle (Gargoyle), Pinnacle Flower (Man Eater), Rokk (Rubble), and Bird Commando (Bantam Imp), which loses the bird and becomes a Jarrian (Stone Imp) when killed except by a counterattack. None except the Rokk have any particular resistances or vulnerabilities. The Monk Gargoyle has a nasty attack that will reduce its victim to 1 hit point, but has lower than usual defense. The Pinnacle Flower has elevated magic defense and can cause Confusion. Everything has less health than you'd probably expect for this point in the game. Ayla can steal new weapons from most of them.

The Rokk is also of particular interest. It disables skill and item usage at the onset of combat, is difficult to hit, and runs away if it survives long enough. However, if you manage to kill one before it runs, it gives 1000 experience and an obscene 100 tech points. Most can only be fought once, but the one northeast of the first save point does respawn if you change screens. Accuracy-boosting accessories will help, and Ayla is ideal thanks to her high speed, damage, and hit rate. The Rokk doesn't really have that much health, so you only need to connect a few times to win.

The screen after the second save point has a Magic Capsule in the corner, but then the sky grows darker as the party climbs up the chain that follows... At the top is a strange platform, with a large blue crystal in the middle.

Marle: This must be where the Philosopher
of Life is being imprisoned...

Marle: This must be where the Philosopher
of Life is being imprisoned...

Robo: This must BE it. The place where the
Philosopher of Life IS BEING confined.

Frog: So it's here... the place where the
Philosopher of Life's being imprisoned...

The "must" I've used in several of the translations is to approximate the effect of 「ね」, and is being used in the looser sense of indicating a reasonably certain conclusion, as opposed to meaning that it's literally required to be so.

The crystal starts to disappear.

A big monster rises out of the depths. I hope everyone's healed...

The two arms jointly use Dark and Fire magic against the group, and can also act alone, with one specializing in offense and the other in healing. The Fire attack is both stronger and more common. Equip your characters with the Red Plate, Red Vest, and Black Plate to absorb some of the attacks for best results. The body, which is the real target, doesn't attack, but it will periodically revive the arms, though with less health than they had initially.

Take out the arms to stop their attacks, then let loose on the body. I find Crono and Ayla's Falcon Slash particularly effective at destroying the arms. All parts have normal defenses, and Ayla can steal a Speed Capsule from the main body.

After the battle, "Manoria Cathedral" plays, and the crystal reappears and dissolves, freeing the strangely familiar Philosopher of Life...

See? You're not supposed to know the missing Philosopher of Life is Bosch (Melchior) until NOW.

Bosch: Indeed, I am Bosch...
But that's odd, how do you know
my name? You do realize this is
my first time meeting you all?
But never mind that, what of the queen,
of the Abyssal Temple project?
Do you know anything?

MELCHIOR: Indeed, I am Melchior.
Have we...met before?
More importantly, can you tell me
anything about the Ocean Palace?

Bosch: Mmh, I see...
The queen's mind is already so far...

MELCHIOR: I see...the Queen has
degenerated to that degree...

Bosch: The greater the energy that the
Nether Relic sucks up grows, the
more the queen loses her sanity...
The queen's human mind has been
consumed by the immortal god Lavos
that sleeps beneath the ocean...

MELCHIOR: The more energy the
Mammon Machine absorbs, the
further the Queen degenerates.
Her spirit has been stolen by the
infamous immortal, Lavos.

The music fades, and the mountain trembles.

Bosch: Mh! The mountain will fall since you
broke the seal here! Decend quickly!

In the village below, a man rushes into the elder's room.

A child and parents are near the bottom of the chain.

The internal storyline progression tracking variable is now 0xB7.

For no discernable reason, a Nu appears in the ruins of Laruba Village once the mountain falls.

The chain shatters, and the mountain flies off a short distance before falling to the ground nearby.

Bosch and Crono's party have safely reached the elder's room. No music plays.

Bosch: Lavos is consuming this planet
as it sleeps beneath the ocean.
If they were to move the Nether Relic
all the way to the ocean floor, I fear that
this might awaken Lavos itself...!
If we don't do something before it's
too late, terrible things will happen...

A man walks into the room.

"Sara's Theme" starts playing, and Sara walks into the room, followed by Jyaki.

Elder: Lady Sara... why have you come
to such a place as this...?

Sara: Please stop...
We People of the Light were once just like you.
The difference is nothing more than that we
are compelled to dance by Lavos's power...

Sara: Bosch...
I thought that I would be able to see you
if I came here, since Grief Mountain fell.

Bosch: Is it all right for you to do such
a thing as leaving the palace?

Sara: This is no time to worry about that.
I'm afraid the Abyssal Temple is complete!

Sara: However, the Nether Relic
will not work without me there...
I want nothing more to do with it...

SCHALA: But without me, the Mammon
Machine won't work.
I have turned my back on that evil
device!

Sara: I have opened the Sky Road.
Please hurry and stop the queen...
stop my mother!

SCHALA: I've kept the Skyway open.
Hurry!
You must stop...my mother!

The music fades out.

Dalton walks into the room.

Dalton: It puts us in a real bind if we can't
get you to run it. Doesn't it... lady Sara.

Bosch: Dalton!
I won't let you do as you please!

Dalton just laughs at this.

Dalton: Old man, I can't stand
how you reek of preaching.
Silence!

He blasts Bosch with magic, rushes over, and grabs Sara.

Dalton: Now, I'm having her come down
to the Abyssal Temple with me.
Interfere, and lady Sara's life...

Dalton smacks Jyaki across the room.

Dalton: Oh come ON, it's no good that
every damn one of the brats with the
queen's blood is so stubborn.

Crono and the others draw their weapons.

Dalton: Whoa, don't you guys interfere either.
I'm not the least bit scared of the queen or
anyone. I'm ready to take the head of a
little girlie like this one any time!

Crono and the others put their weapons away.

Dalton: Now then, let us be off, lady Sara.
Your kindly mother eagerly awaits you.

Can't you just feel the sarcasm oozing? Bleh.

Dalton disappears in a flash, taking Sara with him. "Silent Light" resumes playing as usual.

The internal storyline progression tracking variable is now 0xBA, starting the next chapter.

Rescuing the Philosopher of Life has the potential to make a difference, but so far all it seems to have done is attract Sara's attention, and she was captured almost as soon as she arrived. For now, it's difficult to say whether there's been any historical impact yet.