Retrieve the Flute This quest is not given by anyone, but somehow, someway, it cannot be avoided ....
Go to the Dragoon Caverns south of Castle Ironfist and find the Wooden Flute. There is also a Harp in the caverns, you can bring this insignificant instrument to Andrew Besper who lives north of the Royal Lines stables.
Destroy the Council This quest is given to the party by Slicker Silvertongue. It provides an alternative ending to the game. In order to receive the quest, you must be (a) a member of Baa and (b) have a reputation of "treacherous", which is one level below notorious. Actually the first requirement will help you meet the second. Of course you must also (c) have the flute.
Enter the Sewer of Free Haven (make sure you didn't empty it earlier!!) and play the Wooden Flute. You know what happens next, right? Lead the pack of rats to the High Council and they will do the rest.
Visit the White Goblin Fortunately, there is also a good thing you can do with the Wooden Flute. Bring it to the White Goblin, who lives under Orchestra Hill in New Sorpigal. Remember, the sword is the key!!
When you deliver the flute, the White Goblin will be so pleased with this new instrument for his beloved All Goblin Orchestra, that he will reward you by relating ancient tales while enjoying some of Lord Markham's wine. And if you're real lucky, he just might teach you the basics of Grey Magic ....
A small warning. DO NOT offer any gongs to the White Goblin, or you will regret it so very, very much!

Disclaimer: Although many members of the Guild have had mystical experiences while carrying the Wooden Flute, we were never sure that anything we experienced was real. Then again, can we ever be?