The town of Jidoor hardly seems affected by the changes to the world. The townspeople have a few tidbits to share. One man mentions he's seen a lot of carrier pigeons fly to Maranda, a clue in case you ignored the first pigeon you saw earlier. Many other residents are talking about Owzer, who has been seen with a 'little girl.' Given his love of paintings, this can only mean Relm. One man mentions one of Owzer's paintings, which is of Emperor Gestahl. A particularly helpful man in the Inn reveals that Doom Gaze doesn't restore HP between battles.
Owzer's House
When you're ready to tackle another dungeon, head to Owzer's House at the north end of town. The lights are off, and a voice refuses to let you climb the stairs to the gallery. You can turn on the lamp at the bottom of the staircase to bypass this. Doing so also reveals Owzer's diary, which mentions his many attempts to hire artists and his worry that his latest painting has caused him.
You can interact with all the paintings in the gallery as usual, but three in particular stand out. The picture of pink flowers in the northeast corner is alive, and will attack you in the form of three Nightshades. They can use the Charm Ability to cause the Charm Status (essentially Muddle) or use Poison Pod to Poison them. Fire will take them out quickly.
The second painting of note is on the west side. This is the painting of Emperor Gestahl a man in town was mentioning. Examine ("talk to") it twice and you will receive the Royal Letter, which reveals the location of the Phoenix Cave: at the center of a star-shaped mountain range.
To proceed, you'll need to examine the southwest painting. This, too, will result in battle. You'll be attacked by two Dahlings, human enemies with a vulnerability to Poison. They alternate between status attacks (Mute and the the Dark-inducing Sightless special) and attack spells including Bolt 2 and Ice 2. They also have the very strange habit of countering attacks with Cure 2 on the attacker. They have a large HP total (3,580) but should not be hard to defeat, particularly since they heal you. When the Dahlings are defeated, the painting they were found in is replaced by a door. Enter the door and descend the stairs to the South Basement.
Encounters
You'll find four different types of Monsters here. The only ones that appear by themselves are Vindrs, small birds with low HP totals and a weakness to Fire. When there's only one Vindr left, it may use Beak to Petrify a Character.
Vindrs will sometimes be accompanied by a Wild Cat and two Crushers. All three Monsters use special attacks when they are the sole remaining combatant. Wild Cats may use Fire Ball, while Crushers can use Lifeshaver. Otherwise, both share the Vindrs's weakness to Fire and rely on physical attacks. Wild Cats have a moderately powerful Pounce special, but Crushers have a much more dangerous Crush attack.
Two Crushers may also appear alongside two SoulDancers. These are the most dangerous Monsters in the area, throwing increasingly powerful knives on each turn. Even a lowly Dirk will deal over 500 damage, and by the time they throw an Assassin the total will be more than triple that. Take them out with extreme prejudice, using their weaknesses to Poison or the Man Eater if necessary.
Reaching Relm
There are two paintings at the southern end of the first area you enter. The door on the right actually serves as an exit to two other passages, but you can't do anything with it from this end. If you walk directly in front of the painting of a chair, you'll be attacked by a SoulDancer and four Wild Cats. You can avoid this by taking a wide berth while traversing the hallway. If you do fight, an old lady will occupy the chair afterwards.
There are two doors at the end of this hallway. The one on the left leads to a Moogle Suit, while the one on the right leads onward to another strange hallway. There are three doors here, and one is open at any time. They cycle every few seconds. Before dealing with the doors, head to the northern hallway and grab the Relic Ring in the obscured chest. The leftmost door leads to the next area (which is inexplicably just south of the hallway you came from), while the other two lead back to the door painting in the previous room.
The next area has two doors, one of which is above ground level. Use the other one and you'll end up in the large western room. There are four floating treasure chests. If you approach the shadow under any of them, you will be attacked by another combination of a SoulDancer and four Wild Cats. When the battle is over, the chest will descend and open. The contents of all four chests are mislabeled and contain lesser versions of what they indicate.The chests contain, from left to right, 293 GP, a Tonic, a Tincture, and a Soft. The game claims they contain 2,000 GP, a Potion, an Ether, and a Remedy, respectively.
In order to head to the next room, examine the painting at the north end of the room. You will be attacked by a Still Life. This monster isn't very directly threatening, relying on simple attacks and inflicting Poison and Psyche, but it will counter every attack with Condemned on a random party member. With 4,889 HP and a weakness to Fire, the Still Life should be defeated before any Condemned timers wear off, but don't take you time. The painting will turn into a door after the Still Life is defeated.
The door leads to a small hallway with two doors and a save point. The near door leads back to the door that was in the wall above ground level, while the northern door leads to Owzer and Relm. When you speak to Owzer, Chadarnook will attack.
Chadarnook
Chadarnook alternates between two forms during the battle, that of a woman and that of a demon. It starts off in woman form and will make a single attack (possibly Charm) before switching to the demon. The woman can counter any attacks made against her with a basic attack or Phantasm. Phantasm causes the HP Leak Status, which is like Seizure except that it cannot be removed or overridden. The good news is, you don't need to, and in fact should not, attack the woman version of Chadarnook at all. It's the demon you want to defeat. The bad news is, the demon will often change forms after you've queued up an attack, and Phantasm targets the entire party.
The demon uses Bolt 3 and Bolt 2 in addition to normal attacks, so Thunder protection can help blunt its offense. When it's around half HP, it will stop using Bolt 2 and start using the Ice/Water-Elemental Flash Rain. Fortunately, this is much weaker than its Thunder attacks. Chadarnook can use Bolt 2 as a counterattack as well.
The mechanics of Chadarnook's form switching are complicated that the switch can be triggered one of two ways. If you attack Chadarnook four times, it will switch, and the woman version will attack once and then switch back. More often, though, a background timer will cause the switch. When this happens, the woman will use a series of three attacks before switching back. These can include Charm, Lullaby, or Doom Kiss (which causes Condemned). In any case Charm will end whenever Chadarnook switches back to demon form.
Both of Chadarnook's forms are vulnerable to Fire, though as previously mentioned you should not be attacking the woman form. The demon is also vulnerable to Pearl and absorbs Thunder. It has 30,000 HP, and you'll have to be patient waiting for the demon to come back when it disappears, but hang in there and you should win the day.
After you defeat Chadarnook, Owzer will mention the stone that inspired him to find an artist to paint Starlet. Check the bookcase on the right to find the Starlet Esper. Relm will also join at this point, and you'll be whisked back to the entrance of Owzer's House.