Treasure Island of Doom!
Prize: 7500 renown points, Captain's Dread Sword.
In the inn in Bloodstone, Salty Jack has an interesting treasure tale to tell. He's throat is definitely dry, and he won't talk until you give him some good beer. Go to the barman, buy a Gutter Beer and give it to Jack. When he finishes the tale, accept the mission. Make your way to the Smuggler's Cave, getting rid of the bushes that block the way.
After getting inside, you have to find the ghost of Captain Dread. Jump into the water, then go up all to way. Behind the door you will have to fight a big number of ghosts. A strong spell should do the trick.
A little further, you will find another door, this time closed. You have to find a way to open them. The platform you must stand on is across the door, hidden between chests. Head upstairs, to the captain's room. Now you have to find a way to open the chest on the right. The key is in the table next to the bed. Inside the chests you'll find a lever. Follow the path until you reach a huge machine. Use the lever on it.
You'll get on the ship, and you'll have to face the captain. But just before that, get rid of the pirate ghosts. The fight with the captain is not easy, you'll fall easily if you have a small amount of health. Apart from that, this fight is no different from many other, just use your skills. After the ghost falls, take control of the ship, which will take you to the Lionhead Island. There you will find all of Captain Dread's treasures. In each of the 10 chests, you will find 1500 gold coins.
Across the ship, you have to swim to a small cove.
Under the wrecked ship, next to the cage. You have to destroy some barrels to pass.
Take the path up, behind the bushes jump down on the wreck.
On top of the path, jump to the cliff on the left.
On a small island, behind the tree.
Diving spot, next to the tree.
Digging spot, next to the tree (the dog will show you).
Behind one of the waterfalls.
In a tunnel, behind the plank-covered passageway.
On the left, right after exiting the tunnel.
After getting all of them, follow the trail do the exit. Return to Salty Jack for your prize.