It seems that you were well chosen. I see that you have won the first piece of the Staff. That in and of itself is not a simple task. Tharn, it seems, is not as concerned with you as I had thought he would be. Perhaps he thinks you dead or lost in the sewers from which you escaped. That is well, for I have discovered the second piece's location. There was once a great maze, built by the Archmagus Shalidor to guard what he called Glamorill, the elven term for 'The Secret of Life'. I know not the location of the great maze, which was called the Labyrinthian, but somewhere in its twisted corridors lies the second piece of the Staff of Chaos. Shalidor, according to the old texts, made his home in the Fortress of Ice. He would not have built the Labyrinthian far from his home. I would search to the north for such a place. I wish you well on your journey...
After all, we did encounter Dagoth-Ur in Arena and it was present in Morrowind so I hope we'll get to see more of those historic places we visited in Arena