I haven't played this game in a long time, so I cannot help much. However, as I recall you enter the castle through the sewers but do not exit that way, try the front doors.
My first advice is to take the very long road to Krondor at the beginning, all the way around the whole map to the east rather than the direct approach. You get a lot of money and experience. Not to mention later chapters lock off sections of the map so you can pick up things like spells now that you might not later.
My next piece of advice is that you should know as you go from one chapter to another you will change characters. Remember two things.
1. Owyn and Gorath never leave each others side. So plan their skills accordingly (no use having both good at lock picking for example.) Also Locklear and James are together a lot. (But not always)
2. Late in the game you''ll find that you need to give some of the characters better gear, but they are not allowed to travel to the part of the map that has the only shop that sells them. What do you do? Well there is an old storage trick that can be used. You have Owyn, for example, buy a sword for James. Owyn will never meet him so he cannot give him the sword, but that does not matter. PUT THE SWORD IN A CHEST THAT IS LOCATED IN AN AREA THAT JAMES WILL HAVE ACCESS TO IN THE NEXT CHAPTER. It will be there waiting for them. This is a very useful trick that you will use.
My most important piece of advice though is to to go to this site. [url=https://notendur.hi.is//~eybjorn/krondor/krondor.html]https://notendur.hi.is//~eybjorn/krondor/krondor.html[/url]
It has everything from a walk through, to maps, to spells, to what every mound of dirt and chest in the game contains. There is nothing about the game that cannot be found there.
Also note that the most powerful weapon in the game is not blessed, this is on purpose. If you bless the weapon it causes so much damage that, due to a bug, it would roll over the maximum amount of damage and start at the bottom. This means it will have negative numbers and will heal the enemy. This could also happen if you put a special oil on the weapon to increase its damage.
This could have been fixed in the GOG version however. I do not know.