Oliver's awarded with a number of new Errands when he beats the White Witch, and most of them are fetch quests. One of the easier ones (though still difficult!) is this one, The Runaway Fairies. Yep, you're helping out those weirdo fairies again.
A fairy in Golden Grove is anxiously waiting for someone to return.
The fairy is by the Spring of Life in the Golden Grove, and he is, indeed, looking rather anxious. Though the world's at peace, the fairies still haven't returned to Golden Grove. He wants Oliver to go looking for the wee things and tell them it's safe to come home, and each time Oliver brings him a fairy he'll offer a clue as to the next one's location.
The first fairy is in a place with a red flag bearing a skull.
This first fairy is a bit trickier to find if you don't really think the hint through. Yes, he's obviously associated with the pirates, but he's not on the Iron Wyvern or in Skull Mountain. He's actually a ways down the mountain, by a red flag and a barricade.
The second fairy is in ruins filled with water, specifically in a cell.
Again, obvious enough, but with a bit of a trick - he's not in Prince Ali's old cell. Travel to the Vault of Tears and head to the room with the snake statue. Go up the northwest passage to find the cell with the fairy.
The third fairy is in another world.
That's clue enough. Use Gateway to travel to Motorville and head straight south of where you appear. The fairy is backed up near Philip's Workshop, not far from Oliver's buddy himself.
The fourth fairy is in a 'narrow little cave' with 'tracks' and a 'very pale human'.
Here's a really tricky one, as you've probably never been here before. The cave with the tracks is northeast of Hamelin; you have to fly over the mountains surrounding the city and look for a large green spot where Tengri can land. Near this is a cave containing a Toadstool Sundae, a green chest with a Set of Giant's Thumbnails, a cheery skeletal hermit, and the fairy.
The fifth and final fairy is in a forest, with forest dwellers, somewhere freezing.
'Freezing' is easy to track down, but a specific forest? Harder. The fairy has taken shelter in the largest forest chain on Jack Frost's Playground, an island to the southeast of Yule. You can also find a Frost Flan and a Snow-White Ice Cream in chests.
Find all the fairies and talk to the main fairy in Golden Grove. In appreciation he'll give you two Kaleidostones, 5000 guilders and ten Merit Stamps, as well as some new alchemical formulae for weaponry. (And not the usual useless fairy weaponry, either.)
LanifEibor on August 07, 2015:
I thought the 3rd hint was the small cave by Yule, as it also matches the description. There's tracks in the snow inside, and a ghost. You can't get more pale than a ghost, right?