The Drunken Lizard Pub

I'm not really sure where to go next. I made it to Moonrise after speaking with Lilith, but everyone is nicer than I was told they would be (except the armorer; he's an ass) and the inn she told me about doesn't seem to be there (and nobody has heard of it). I got a lot of quests there, but they mostly take place in Elderoak forest, and I can't figure out how to really get in there. All of the bridges are out. There's a locked gate, but I don't know where the key is, and I can't seem to break it down.

So I backtracked all the way back to Rockhammer and discovered there was more of the mine to explore. So I did that, and made my way down to Deadman's Strand. I can't go to Castle by the Sea, though. There are a lot of goblins camping by the entrance, and they utterly destroy me. I have a 47% chance to hit one (in Finesse mode) and they have a 70%+ chance to hit me. I can't even take on one. (Apparently goblins have really beefed up; or I suck way more than I should). So I'm assuming I need to return there much later in the game.

As a result, I have nowhere else to go and nothing else to do. Either I missed something or my level 8 fighter is built way worse than I thought. :/

Do you have the quest from the innkeeper to take the note to the ranger? You need to speak to Lilith before you'll have the option to get the quest. Don't feel bad about the goblins, they're supposed to be tackled much later. Or if you prefer a bigger hint:

[+] SPOILER

The ranger camp is hidden in Elderoak, with the entrance being next to a torch. They can give you a key to the locked gate. Once you finish the innkeeper's quest, you'll also get access to more of Moonrise.

I do have the letter, yes.

A torch, you say?

*a few minutes later*

Aha! Wow, that was well-hidden. I'm not sure I would have found it without the clue. Thanks.

Arkos wrote:everyone is nicer than I was told they would be (except the armorer; he's an ass)

This was my thought exactly.

Well, that didn't last long. I made my way to the house, read the note, read the sign on the wall...can't for the life of me figure out what to do next. Presumably I need to put the right password into that book out in the yard, but I can't figure out what it could possibly be.

Here's a hint:

[+] SPOILER

Talk to the ranger about it, and pick up the book from the chest in a house in Old Moonrise (once you're there). The note the ranger gives you, plus that book will really help. There is a way to the other side without passing through the dungeon, but it's a really really long path. I did it on accident on my second playthrough though.

Is 'Old' Moonrise the one with the smug smith? Because that's the only one I've been to so far.

No - the jerk smith is in Moonrise. After talking with the ranger, and returning to the inn keeper there, you will learn how to get to Old Moonrise.