Matt Bird writes all sorts of nonsense, but he dedicates a large chunk of his time to writing game walkthroughs.
Two stones down, one to go. The last of the three is on the northern tip of the continent of Autumnia, a place that's not easy to reach . . . and when you're scoping out a landing spot on your trusty dragon, you may notice something in the water, not far from your destination. Get in close and it appears to be a massive boat. Hmm.
Travel to Hamelin, hop in the Sea Cow, and sail to the far north. The boat will be circling the island off the northeast shore of Autumnia. Save, make sure you're at tip-top health, then approach the vessel. Sindbah will correctly state that it is a 'ghost galleon', attracting the attention of somebody on board—who will promptly send a giant robot named Jetsam over to mangle your crew. Makes sense. Whether you have electrical attacks or not, Jetsam should be a piece of cake.
Once the robot is scuppered, the crew will come aboard, led by their vile commander, Cap'n Crossbones. The pirate claims to have the final magic stone, and he'll hand it over—if you can beat him in a fight. Time for an actual boss, now, is it?
As far as undead pirates go, Cap'n Crossbones is pretty disappointing. He's a decent hitter, and his Plunder attack allows him to steal your HP, but he's not capable of dishing out enough damage to really trouble your crew. Defend whenever he's Plundering to minimize the effects, then wail on him. Swashbuckler is his only other notable weapon, and even it isn't that dangerous—just move away from the captain when he starts to use it.
After Cap'n Crossbones goes down for the count, he'll lose his head—and his Sun Stone, which he apparently kept in his skull. At least he was telling the truth?
It was an underwhelming way to end the search, but you now have all three Magic Stones. One problem—they're way too big to fit into Mornstar. Back at Skull Mountain, Kublai suggests giving Hamelin a once-over. Everyone seems happy enough to visit Marcassin again anyway, so it's off to the big city.
To the Porcine Palace
Talk to Marcassin in the Porcine Palace. He hits the problem on the head: the stones won't fit because you have the wrong version of Mornstar. Oliver needs to find the Mornstar of today, not of over a decade prior. He suggests seeing Khulan, the only Great Sage you haven't yet met . . . the problem being that he has no idea where she is, these days. The only Great Sage left to ask is Rashaad, Esther's father, so it's off to Al Mamoon for answers. Warp out of the palace . . .
Speak to the Ghost
. . . and, just out front, everyone will spot the ghost of someone from Xanadu, Khulan's old kingdom. Convenient! Use Spirit Medium to talk to her (if you don't have the spell, you'll have to go to Ding Dong Dell's gravesite to get it—check behind the big stone) and you'll learn that she was one of Khulan's guards. She describes the downfall of Xanadu, tells you that she senses Queen Khulan somewhere to the north, and hands over the Wings of Xanadu. Off to find some royalty, then, is it?