Talk to the girl at the guild and give a positive response. Now leave Shanoah and head for Dr. Heifer's house.
Knock on the front door. Talia will invite you in. Talk to her again and she'll show you round. Eventually you'll regain control in a bedroom. Talk to Cycas, then leave the room.
You can leave Heifer's house now if you want, and return to the guild; you'll get some gold and experience for your troubles. There's more to do here, though, and you get less of both if you leave now, so don't. Instead, go down to the lab again. Examine the machine in the centre of the room, looking particularly at the gear on its bottom left. There's a handle on the second shelf from the left behind it. Use the handle with the gear, then turn it twice to reveal a staircase. Cycas will rush in; ignore him and go downstairs. Enter the room at the bottom. Check the crates in the corner for a chance to get some Revivals. Now take the door in the back wall - there's a fairly easy-to-miss switch in the wall to the right of it that'll open it.
Inside, there's another switch which opens the gate to the right; go through. Look into the cells; when you've checked the rightmost one Cycas will come through. Eventually he'll ask you whether you know of Nealertos; I hope you'll answer truthfully, although it doesn't matter in the slightest. In any case he'll be lost in thought again, so leave him to it and head back up to the lab. Kill the Fang Gel; go upstairs and fight the Shadow Dueller. He's nasty; his Magic Surge attack can really hurt, and he can sometimes heal as fast as you hit him; worse, you can't hurt him with magic. When you've beaten him, follow Cycas.
Go upstairs, and through the left-hand door into Heifer's room; examine the bookshelves to find his keys. Now you can explore a bit further: there's a letter to Cycas in the other room up here, Talia's, and you can put two of the Chemicaloids in the basement out of their misery and talk to the third. So do all that. When you return, Heifer will be dead. Talk to Cycas.
Back in Shanoah, return to the Guild for your reward.