If you haven't already been here before, you'll notice that the carvings on the walls whilst climbing up towards Garoh tell a story...anyway, if you don't get it, it'll all become clear at the top (assuming you haven't already been here).
When you reach the top, walk forward. You'll hear a wolf's howl, and a vaguely humanoid-shaped dog will appear. You'll remark on it being there, but he'll overhear you. Kraden believes it's a lycanthrope, or what you and I know as a werewolf (don't worry, these ones are friendly). Anyway, there's a discussion about what one is, some explaining, a bit of Kraden being excited for all the wrong reasons, then you gain control of Felix again.
All the people in Garoh are wearing hoods. You may already have guessed why. Like I said before Air's Rock, for the mean time only the Inn and Sanctum are available. Head to the north of the town (use the Inn or Sanctum first if you need to). What could only be described as the master werewolf appears out of a supposedly solid rock, using Reveal, notices outsiders, and then runs back inside. Use Reveal to pursue him. In the cave at the bottom, the mini-werewolf will appear again. You'll speak a little too loudly, again, and he'll run off...again.
The path to the right is a dead end, so head left. Here, south is a dead end, so go north. Follow the path around here, and you'll eventually reach a chamber. You'll think it's another dead end, but then the master werewolf reveals himself (thanks to that ever-trusty Reveal symbol, you would have checked the weird stone in the middle here anyway).
Anyway, it turns out that Mr. Master Werewolf is actually called Maha. You'll have a short discussion about Psynergy, and then rest in the Inn for free. Well, it's not really a free rest, because you don't get any "sleep" and don't recover any health or PP. Feel free to rest again if you want, but head back to Maha's chamber. You'll have a longer discussion about various philosophical topics, and how it relates to Psynergy. Sheba will temporarily become a genius and outsmart Kraden and Maha, then he'll thank you. You get a Djinni! Ether restores PP, but more importantly you can now use Flora! Now, leave the cave.
Do whatever you need to in Garoh, but don't leave yet. In the back of pretty much every house there is a door leading to an underground network of caves - probably what these people use to get around whenever they turn into werewolves. Anyway, to the south of these tunnels there's another Reveal symbol. Use Reveal, jump across, and leave the town area to the south. The chest that you couldn't reach before is now reachable - go to it to get a Hypnos' Sword. Use the groove to get back down, then exit to the south. Go back down the cliff, and exit Garoh.
Back to Yampi Desert
You've been through Mikasalla before, so use your map to navigate your way back. You'll want to buy whatever new equipment you need now that you have a lot more money, and use the Inn/Sanctum. Now, follow the path all the way back north again to Yampi Desert.