I thought I'd add an account of how this went for my group.
I
had some trouble figuring out how to get the group to go to Thundertree in the first place. Eventually I decided to use Gundren's map and Iarno Albrek as the hooks to get them there. When the party rescued Gundren from Cragmaw Castle, they couldn't find the map anywhere. Gundren remembered seeing a wizard once or twice around the castle, and they found a note under the pillow of one of the beds with just the two words "Thundertree" and "Venomfang" on it.
The wizard was none other than Iarno Albrek, who had escaped from the Redbrand Hideout and fled to Cragmaw Castle. While there, I decided, he got the idea of attempting to take over the whole lost mine operation for himself. Knowing that he would need powerful allies to challenge the Black Spider, he stole the map (right out from under King Grol's nose!) and went to Thundertree to enlist the aid of Venomfang.
The party had been deputized by Sildar Hallwinter, who set himself up as acting head of the constabulary in Phandalin. Tracking down Iarno was one of their assignments.
I also added one thing to the heirloom side quest: a locket with a portrait of Mirna's grandmother was in the herbalist's shop along with the emerald necklace. Mirna most wanted the locket back, so she told the PCs they could keep the necklace if they'd bring the locket to her.
So, once the group found out what Thundertree was, this was the situation:
1. The PCs' goal: get the map. Bring Iarno Albrek to justice.
2. Iarno had infiltrated the cultists, pretending to be one of them. This gave the PCs a roleplaying challenge to figure out which one of the identical masked figures was Iarno.
3. The cultists' plan/goal: they were attempting to sway Venomfang with treasure, bringing a tribute to her every day. (Note, I made Venomfang female just for variety.)
4. Iarno's plan/goal: he had been meeting with the dragon in secret, offering to sacrifice the cultists to her in return for her cooperation. He had also promised a share of the wealth of the mine when it was up and running again.
5. The dragon had persuaded Iarno to hand over the map to her for safekeeping as a pledge of his good intentions.
6. The dragon's plan/goal: she liked having the cultists bring her treasure every day, so she hadn't committed to helping Iarno (but she would when the cultists run out of offerings). She also was enjoying watching the politics and jockeying between the factions.
7. The druid's goal: cleanse the town and get rid of the dragon.
As the PCs approached Thundertree, I described the thick chlorine-scented fog hanging over the countryside and the brilliant green moss growing on the trees, thicker on the side closest to the town. When the PCs arrived, they first met the druid, who asked for their help in cleansing the town of twig blights and ash zombies. I used the suggestion from
earlier in this thread this post on the WOTC forum about the druid giving them some herbs to sprinkle over the zombies to prevent them from rising again. While they were working their way through the town, they found the cultists holed up in their cottage. They pretended to be members of the cult themselves who were traveling without their masks (a bit silly, but I ran with it), and they learned that someone calling himself Aldor had recently arrived. They identified him as Iarno, whom they hadn't actually seen, because he was the only one with a black beard.
After they finished clearing out the town and retrieving the hidden jewels from the herbalist's shop, the party went to talk to the dragon. They learned that a "cultist" with a dark beard had been visiting her secretly, promising her wealth and sacrifices. They convinced the dragon to show them the map. They told her it had nothing to do with treasure and that "Aldor" had fooled her. Then they offered her the emerald necklace plus delivery of the cultists for her breakfast in exchange for the map. The dragon agreed.
Early the next morning, they went back to the cultists' cottage. They said they had been negotiating with the dragon and she was ready to work with the cult, so everyone needed to go to her tower right away. The cultists were excited and relieved, as they were almost out of treasure to give the dragon. Only Iarno was suspicious. When the rest of the cultists went into the tower to become dragon's breakfast, he faced the party and tried to fight them. They made short work of him, as he wasn't much of a challenge for a level 4 party. In retrospect, maybe I should have had him tell the rest of the cultists they had been betrayed, and brought them into the fight too. However, I wanted this to be mostly a roleplaying encounter for the PCs, so I guess it's not so bad.
The party dragged Iarno's body into the tower for the dragon to eat, traded the necklace for the map, and suggested that the dragon check out Cragmaw Castle as a much larger and better lair. She promised to look at it later. One player wanted to wait until she left and raid her hoard, but he was persuaded that it would not be fun to have a dragon chasing them for the rest of the adventure. As they headed back toward Phandalin through Neverwinter Wood, they saw the dragon flying south in the distance.
