As you are traveling through Faeriewood, a loose branch will fall on Brandon and knock him out. He will awaken in Zanthia's hut. She asks him to fill a flask at the nearby fountain for her.
At the fountain, you will encounter Malcolm once again. He steals one of the crystal balls, ruining the fountain. You will need to find it in order to restore the fountain and get that water. As you wander Faeriewood, you will find a burning branch. Use Darm's scroll once again to extinguish the flames to find the missing crystal ball. Use it to restore the fountain and get a flask full of water.
If Brandon drinks a flask full of the magic water, one of the jewels on the amulet will turn blue. You can use the blue jewel on the amulet to retrieve the floating Royal Chalice but a little furry creature named Faun will show up and steal it. You will have to deal with him later. After delivering the magic water to her, Zanthia will ask you to bring her some blueberries. These can be found west from where you retrieved the missing crystal ball.
Upon returning to Zanthia's lab, she will be missing. Investigate the scrunched up rug to locate a secret passage. You will find yourself on the other side of Faeriewood. You can find the Crystals of Alchemy to the east which will help you out later. To the northeast, you can find the tropical lagoon and some orchids. Pick 2 to take with you and return to Zanthia's lab.
If you throw the blueberry into the cauldron, the water will turn light blue but it seems it is only half finished. You can complete the mixture by adding a blue gem like a sapphire to the mix. Fill 1 flask with the completed blue potion. If you combine the orchid with a red gem like a garnet, you can make a red potion. Combining a tulip from the sparkling stream in Timbermist Woods and a yellow gem like a topaz will make a yellow potion. You will want to make 1 blue potion, 1 yellow potion and 2 red potions.
At the Crystals of Alchemy, you can combine the potions to make powerful new potions. Combine a red and yellow potion to make an orange potion which will allow you to go to Castle Kyrandia once you are done in Faeriewood. Combine a blue and red potion to make a purple potion which will shrink Brandon to a small size, allowing him to enter Faun's home and get back the Royal Chalice. Save yourself a bit of trouble and pick up an apple before you visit Faun. You can find an apple at Brandon's home, outside the cave leading to Faeriewood or even on the other side of Faeriewood if you ate both of those apples. Drink the purple potion outside Faun's door when you are ready and trade the apple for the Royal Chalice. Once back outside, you can find the chalice to the right of Faun's door. Now that you have the Royal Chalice, Iron Key and orchid, you are ready to go to Castle Kyrandia by using the orange potion at the tropical lagoon.
Summary
Go to the fountain to get magic water for Zanthia
Recover the missing crystal ball using Darm's scroll on the burning branch
Bring the magic water to Zanthia
Use the blue gem on Brandon's amulet to get the Royal Chalice out of the air
Get the blueberries at the waterfall and bring them back to Zanthia
Use the secret door under the rug in Zanthia's lab to get to the other side of Faeriewood
Pick 2 red orchids at the tropical lagoon
Use Zanthia's cauldron to create 2 red potions, 1 yellow potion and 1 blue potion
At the Crystals of Alchemy, combine a red and yellow potion for a orange potion
Combine a red and blue potion for a purple potion
Get an apple then use the purple potion outside Faun's home to shrink down and pay him a visit
Give him the apple for the chalice and find it outside his door
Use the orange potion at the tropical lagoon to travel to Castle Kyrandia
