Rylock, the doorman in front of the Harper building, can be found southwest in the dock district. He will ask you to kill some evil creatures in Prebek's house before he will allow you to enter the building.
When you are inside, the Harpers will say that you can't enter the floor above without harm if you don't have a Harper Amulet. An amulet can be found in one of the rooms on the base floors.
Go to the first level floor. With the Harper Amulet equiped, the Spectral Harpists won't attack you and your party and they will answer some of your questions as well. You will find some letters somewhere here which suggest that the Harpers have polymorphed Montaron into a bird.
Go to the room with the aviary. Enter the aviary and take the Harper Bird who was once Montaron.
Leave the harper building and give the bird to Xzar. He will cast a reverse polymorph spell, but the bird is actually an assassin from the Harpers named Lucette who kills Xzar. The party has been misled.