Raetommon has gone deep into the Oldwalls with the Forge-Bound Master Zdenya, and more importantly, the Magebane Helm. You need to find him and retrieve the artifact.
Make your way towards the north-western corner of the location, picking up the Rho Torchkey on the way. Use it to power up the beacon. In the beacon room, use the Citren on the upper left beacon, Rho on the central, and Amith on the upper right beacon to activate the floorplate.
Approach the central platform to confront Raetommon. After wading through his gloating, indicating that he's gone completely bonkers, you can attack or intimidate him (Athletics 52) to hand over the torchkey. The latter option causes him to attack, but he does so without the support of the Bane or the Havoc.
Use the torchkeys on the beacons to return outside. The Emir (green) goes to the lower left beacon, Citren (yellow) to lower right, Rho (red) to upper left, Amith (violet) to the upper right.
Crap. After three torchkeys are activate, the Havoc wakes up and attack. Kill it. Pick up the Greater Healing Potion recipe from its remains.