1. While you were wandering around in Blinder's Way, a Warlord named Blackwing flew over Camelot Castle and dropped the Tears of Gorjus on Squire Everett. Everett is now sick and slowly dying, and Merlin informs you that only the Horn of the Zug can save him. You must travel to the Swamp of Zagar to find it. Leave Camelot, go to your map screen, and warp as far north as you can so that you end up in Blinder's Way. Exit screen left from Blinder's Way and you should end up in the Swamp.
2. Once you enter the swamp, take the bridge and go all the way left, then all the way down. From there, keep following the bridge until you end up back at the right side of the screen. If you leave the screen to the right, you'll end up at Blaise's house, but he won't be of any help right now. Instead, follow the bridge going down, and then go all the way to the left until you come to a clearing with a single huge tree in the middle. While all the trees in the swamp have scary mouths, this is the only one with a complete face. Go to the left side of the tree and the Zug (it looks like a cross between a rhino and ankylosaurus) will come charging at you from the left side of the screen. Sidestep his charge so that he rams his horn into the tree. An object that looks like a traffic cone will appear on the ground. This is the Zug's Horn Shaving, so grab it.
3. From where the Zug attacked you, take the bridge going west and keep following it a short ways until you see two poison frogs. You should also see a Magic Shield sitting on a bridge going south from the frogs. This is Lancelot's Shield. Get it.
4. Turn around and go back to where the Zug attacked you. Take the bridge going north just a short ways and you'll see an Eye of Newt. Get it. You will need it later.
5. Now turn around and go back to the Zug's area and take the bridge going south. Take it all the way south and leave the screen so that you exit the swamp and end up back on a forest trail. Once on the trail, go south and as soon as it splits, take the righthand path going east. Keep going east and watch along the row of trees that line the upper part of the path. Eventually you'll see a Hairball underneath one of them. Grab it.
6. Once you've got the Hairball, turn around and go ALL the way back to the left and keep going until you leave the screen going west. You'll be in a rocky area. (This trail eventually leads to Stone Keep, but you can't get in through the front.) Instead, go north just a little bit until the trail splits and then go back one screen east. You'll be on a mountain trail. Keep following it around east and then north until you see a Magic Shield sitting on the ledge. This is Gallop's Shield. Get it.
7. Now go to your map screen and warp back to Camelot Castle. Talk to Merlin and he will use the Zug horn shaving you got to cure Squire Everett. Now he wants you to find Phil's key in Stone Keep, but there is no way to access the castle. Only Blaise, the wizard in the swamp can help, and Merlin will give you the password "Myrddin" so that he'll help you.
8. Leave Camelot Castle and before you do anything else, make sure you still have the Nightshade I told you to get way back in Quest #2. If you've used a password to continue since picking it up, or if you didn't get it to begin with, it might not be in your inventory anymore. Go back to Welton Village and find it in the woods northeast as I had told you in Quest #2 if you do not have it.
9. Warp back to Blinder's Way, re-enter the swamp and follow the path I gave you before under #2 to get to Blaise's house. Go inside and talk to him. Keep talking to him until he turns your party into birds. You should have all three ingredients he needs so just keep talking to him until he does it.
10. After the cutscene, you'll find yourself in Stone Keep. It only has one floor, but the maze can be slightly confusing. Refer to the Dungeon Maps if you have trouble, and refer to the Boss Strategy for help with beating Warlord Hammer (if you need it). Return to Camelot when you're done and come back with Phil to pick up the Key of Truth. Congratulations! End of Quest #4.