Edward's Fight
After speaking with Rosa, a cut scene will begin, when Edward goes outside the house and is attacked by a monster. You will have to fight him, but it is fairly simple. Just attack with the harp and you will win easily. When this is finished, and you regain your party leave the town.
Find Mt. Hobs
Get into the Hovercraft and go back to what is left of Damcyan Castle. Now head towards the Antlion cave, except rather than going south towards the cave, take the hovercaft further right until you see a path in the mountain. Go into that part of the mountain, and you will be at Mt. Hobs.
Base of Mountain
As soon as you enter a cut scene will begin and Rydia will get over her fear and learn the Fire Spell. There will be 2 doors that you can go into, go into the one on the right (the left side has chests and a save point if you wish).
Summit and MomBomb
Continue up the mountain, and you will reach Yang fighting some monsters. In this battle if is best for your characters to just use physical attacks, using Rosa to heal when necessary. During the battle the MomBomb will grow, then split into 6 individual bombs. You should concentrate on killing one bomb at a time, because if the battle takes too long, the bombs will explode and cause a lot of damage to one member of your party. When you finish the battle Yang will join your party.
Down the Mountain and to Fabul
Go through the door immediately to the north. On the other side, go across the bridge and down to the south and off the mountain. Once back to the outside again, head to the east through the forest and the around the mountains until you reach the castle surrounded by a river. This is Fabul, so head inside.
Defend Fabul
Go Straight ahead into the door, and you will be in a room with an item shop/inn on one side and a weapon/armor shop on the other. You should be sure to buy sufficient healing items and whatever weapons and armor for Cecil, Edward, and Yang, because in the upcoming battle those will be the only characters available. When you are satisfied go straight ahead and you will be in the room with the king. Speak to him and when you are ready, begin the battle.
Incoming Monsters
Once the battle begins you will be bombarded by monsters of two types. They will be either a set of 3 soldiers or a Imp Cap., Weeper, and Water Hag. When fighting these enemies it is probably best to have Edward use the healing items when needed because of his weak attack power. Continue fighting these until you are finally backed into the Crystal Room.
Golbez and Kain
Suddenly Kain will enter the room. You will be automatically entered into battle with him. You can attack him, but there is no way to win, and eventually he will defeat you. At this point, a cut scene will begin and Golbez will enter, take the Crystal and Rosa. Rydia will bring the remaining members of your party back to life.
Talk to the King of Fabul
Once the scene is over, you can leave the crystal room. Go back out of the throne room, and back down the stairs directly ahead. Now enter the inn and go towards the innkeeper. He will automatically have you rest in one of the beds. After discussing your plans, you will wake up in the King's room. He will give you a more powerful sword and lend you a ship to travel back to Baron. Leave the kings room and go all the way down the tower. When you emerge you will be in a tower on the right, go down and into the door at the center, beneath the two towers. Now exit the castle.
Shipwrecked
Outside you will see a ship to the northeast. Climb onto the ship and a sequence will begin in which you do not control your characters. Your ship is attacked by a monster, knocking Cecil unconcious. When you awaken you find yourself on land again, next to the town of Mysidia. Go into the town.