History - The valley was once a Dwarven kingdom. This kingdom was typical for the period, with a central above ground structure serving as a palace and a storeroom for the Dwarven lord and his retinue. Human slaves tilled the fields of the valley, ruled by various Dwarven nobles. The current volcanic system first erupted some eight thousand years ago, burying an otherwise fertile northern valley beneath hundreds of feet of ash and occasional flows of lava. Had the valley not been under attack by hobgoblins, the palace might have survived. Subsequent eruptions added additional layers to the plateau. Erosion and the actions of humanoids periodically expose the ruins of the palace and other smaller structures.
As the party starts making it's way to the dragon's lair, one of the nearby volcanos undergoes a minor eruption. Minor, except that the party is very close, and is forced to seek shelter. Vision and hearing obscured by the ashfall and howling searing winds, the party is separated. The larger portion is forced to seek shelter in a nearby cavern. Ash continues pouring in, forcing the party ever deeper into the cave, and sealing the entrance. When the PC's go as deep as they can go, they discover an incongruous wall, and a partly obscured passageway with a sealed bronze door. If they clear the doorway and open it, they can gain access to the ruins of the palace of an unknown Dwarven king from eight millennia past. The palace is not large by modern standards, but it has been accessed from several pathways, and can be used to sneak into the Dragon's lair by following the Kobolds long enough. The old well has long since dried up and now leads to a layer of 'Underdark". This is how some of the local vermin made their way in.
Entrance cave - Two giant scorpions, one on the ceiling and the other buried in ash. The first will attack, and then a second will emerge.
Lava Tubes - These lead to what seems like a maze of warrens, with occasional kobold traps and centipedes, plus the occasional kobold foragers. If one gets lost, they will emerge on the surface 1d6 hours later. If one follows the Kobold tracks, they will emerge in the dragon's lair, in Tunnel #4 after 1d4 hours.
Well - This vertical shaft leads down into a dark abyss that leads into the mountains.
Sections of the Palace
1) Outer Ward - For interaction with the outside world and non-dwarves, designed to present a fearsome presence. Includes a great hall, and an imposing looking throne, guardrooms, and private chambers. Guest quarters for visitors, and a small servant's wing. Infested with vermin from the outside - Kobolds, bugs, etc. Lots of old ash and dust, some skeletal remains of unknown origin.
2) Inner Ward - Beyond more doors and down a set of stairs, is the area meant for interaction with other dwarves. A second, more traditional throne room, offices, quarters for guards and visiting dignitaries. Washrooms, barracks. Some parts are filled with ash, those areas may have intact treasures. Buried in the ash are the odd armored skeleton that will reanimate just because.
3) Residences - Royal apartments for the monarch, his wives and children, and junior family members, royal bath. Guards and servants quarters, kitchens, laundry in the center. Cistern for water. This area claimed by Mind Flayer exile and his retinue of several enthralled Orog bodyguards, and a pet Alpha Grick. He almost never leaves this area, as he is an exile from his realm. The grick frequently wanders the lower levels hunting.
4) Stores, Granaries, and Forges - A series of long hallways, slaves quarters, rooms for storing bulk goods, counting rooms, and so forth. Infested with bizarre vermin from below, fungi patches, and an ooze or two. Giant centipedes and a giant spider live down here, hunting in the caverns deep below through the cistern.
5) Treasures and Tombs- Catacombs, shrines to ancestors and gods, treasure rooms. Some parts ashen, others well trapped. Many parts infested similar to the Granaries. Vault sealed with heavy bronze doors, inside guarded by two Medium Stone Golems (AC-17, 100hp, +8, 2d8+5 slams, Magic Missile 1d4+1 x 4, Recharge 5-6). Corridors leading to the vault are littered with remains and carrion animals from below. Tombs are guarded by three poltergeists (Spectres) which will attack if the remains are disturbed; they will manifest from the three helmeted skulls in alcoves. Every skeleton buried in the crypt has bronze scale armor and a bronze axe of ancient design (1 in 20 of being a +1), as they are all kings, queens, and princes.
900 cp, 6000 sp, 2200 gp, 130 pp, Bloodstone (50 gp), Carnelian (50 gp), Citrine (50 gp), 2 x Moonstone (50 gp), 2 x Onyx (50 gp), 2 x Sardonyx (50 gp), 2 x Star rose quartz (50 gp), Zircon (50 gp), Potion of Invisibility, Javelin of Giant Slaying, Javelin of Dragon Slaying, Drum of Dread (as Pipes of Haunting), Helm of the Ram (as Ring of the Ram), and lots and lots of dust.