Divinora
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This mission really drained my patience! After trying it five times in different ways (but always capturing the lower Elven town), I gave up, read the entire thread, started over, and in 6-9 days (I don't remember exactly), I reached the northwestern Elven castle, captured it (only 2 Nightmares remained), and successfully rebuilt it. Gilraen settled in the lower castle, and after letting him stay there for a while, I defeated him. The rest was just a matter of course. Yes, I captured the lower castle last, after maxing out my hero.