The party discovers that the tunnel leads into one of the internal walls of Old Borealis, and they ascend via a system of ropes and pulleys into a hollow tunnel in the wall. The passage is blocked and they find a dirty boy wearing an over-sized bowler hat crouched next to a elongated mound surfaced in small stones. The boy threatens them with a knife, but Lilly talks him down, and Tobias drafts the boy. His first name is Oliver and Tobias dubs him, "Mister Hat."
The group meets people who "have no skin" - or more accurately, their skin is completely transparent. They think the visitors are some kind of monsters, and don't want their children to see them.
Tobias talks one of them into coming with the group when they are to leave.
The group departs the area via a drainage tunnel, but ends up coming back when the tunnels get smaller, Mister Hat can't lift the manhole cover at the top of one of the access shafts, and red rain threatens.
As the rope the group left to the misbegotten area is gone when they come back up the tunnel, they end up outside the city entirely and have to make their way back in.
The party blames the misbegotten for the missing rope. The first beings the group encounters in the misbegotten area when they return are Peeler automata - drawn in by one of the party whistling.
The party departs the area by going up the stairs to one of the city's train stations atop the cities walls, claiming that they were kidnapped by the misbegotten. They are directed onto a train, where they overhear one human policemen tell the other that it'll all be sorted out at the Change Cage....