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Lestat's sword is in the City of the Damned, where Rynn can solve the optional quest to Slay Khossa Vole. It's stuck in a tree near the western edge of the graveyard. It's easier to search for this weapon after the necromancer and his skeletal cronies are defeated.

This is a several part puzzle which Rynn can solve to earn a whole lot of gold. The first two steps take place in the house where Rynn can slay spiders in a villager's basement. Go to the deepest room in the

basement, where there are crates in the center of the floor. Use a melee weapon on the east wall in this room to break it down, and reveal a switch. Pull the switch and then go back

upstairs. Enter the door beside the bed and pull the switch there.

The next step is inside Brekk's weapon shop. Go through the door in the corner of the shop, beside the stacked crates. Pull the lever inside.

The rest of the puzzle cannot be completed until Rynn returns to Surdana from the gateway in Shiverbane There is a fourth switch for Rynn to pull when she's investigating how the minions of the desert lords entered the palace. Go into the passage that's hidden by a bookcase and go down the first set of stairs. There is a breakable wall in the chamber at the top of the second staircase. Hit all the walls there until one of them breaks. Go through the hole and pull the lever there.

Return to the chamber outside Lady Myschala's throne room and enter the door on the east wall. Enter the first door on the right to find several chests of gold. Collect your reward.