S'krivva tells you that Hieronymous Lex is posing trouble in the Waterfront again. Go to Imperial City and talk to one of the beggars, asking about Methredhel. You'll know that she's hiding in Dynari Amnis' House in Talos Plaza District. It turns out she has already come up with a plan to turn the tide. Your next target is The Arcane University.
The job is surprisingly easy. Go through the front door, and Sneak to use these magical portals twice. You'll reach the Arch-Mage's quarters. Take his staff and leave a note on the nightstand - well, so much for the mages' high security. Go back to Methredhel, who tells you to keep an eye on Lex.
The guard captain can be found somewhere around Waterfront's houses. You'll witness a funny scene in which a fake Dremora is sent from the Arcane University to deliver his new orders. Take the message that he drops, and go back to Methredhel.
As an act of goodwill, the Guild wants you to return the stolen staff. Break into Ontus Vanin's house and leave in a crate marked on the map. Go back to S'krivva to receive your reward.
S'krivva wants you to find a thief named Theranis, who disappeared while looking for a unique book in Skingrad. Go there and as usual start with questioning the beggars. Theranis has been arrested. Go to Skingrad Dungeon in the castle.
The warder will tell you that the count's steward is looping for someone to work with the prisoners. Find him (his name is Shum gro-Yarug) and apply for the job. That will grant you access to the cells.
Instead of Theranis, you'll meet Larthjar in there. Talk to him and free him if you like. There are some blood stains on the floor. On the right wall there's a movable candlestick that opens a secret passage. When you reach the wine cellar, search for another movable candlestick to go further. A vampire named The Pale Lady stands before you.
... and the second candlestick.
When you defeat her, approach dead Theranis' body. Behind the bars on the right, there's you old pal Amusei. Free him, using the key that you found by the vampire's body. Help him sneak out of the castle through the Dining Hall.
Amusei will gratefully tell you about the book that Theranis hid. It's under one of the bushes in Skingrad - an appropriate map marker will be added. Go back to S'krivva with it.
Taking Care of Lex
It's time to 'eliminate' Hieronymus Lex the thieves way. Go to Anvil to talk one of the beggars. He'll tell you to find a man named Orrin in the castle. When you talk to him, he'll open a secret passage for you. When you reach the other side, touch the left pillar to find yourself in the corridor. Sneak to the desk and open the lock in it. Take the List of Candidates.
Talk to one of the beggars once again. You will be told to go to an abandoned house near the local Mages Guild. In there, you'll meet a man named The Stranger. Talk to him and pay him 500 Gold to fence the letter. Wait 24 hours and your phony recommendation for Lex is ready.
Go to Imperial City Prison and break into Imperial Legion Offices. Use the Imperial Legion Seal that is laying on the desk. Go back to Anvil Castle and give the fenced List of Candidates to the Countess. Now find Lex in Imperial City and tell him that he has been reassigned. So much for the Thieves Guild's greatest nemesis.
Go back to S'krivva to tell her the good news.
Turning a Blind Eye
If you completed all the missions above and fenced at least 600 Gold, you will be contacted by Methredhel, who'll tell you that Gray Fox himself is waiting for you in Helvius Cecia's House in Bruma.
HINT: If you want to speed up the messenger, go to Imperial City and Wait for several hours.
Gray Fox tells you to go to the Temple of the Ancestor Moths and retrieve a certain crystal from there. You'll receive an appropriate map marker. Once there, go inside the building and talk to all the monks. Raise Brother Holger's disposition and he will agree to show you the entrance to the catacombs. Follow him there.
He'll open the passage to the dungeons, where you'll be left alone. There are a few levels of caves before you. Always follow the map marker and you won't get lost. The crystal you are looking for is on the last level. Look around and you'll see a ladder that will take you immediately to the ground level. In one of the crates there's a note about Fox's mysterious cape - if you read it, you'll get an additional dialogue option later on. Go back to Bruma.
HINT: Unlike other Thieves Guild quests, this time you can freely attack monks that are guarding the dungeon.