Yeh, you need to go north from the Friendly Arm in. It took me ages to find out how to do this bit. You need to leave by the top edge of a map if you want to reveal a map to your north and so on, so make sure you are leaving the maps by the top or whatever edge you want to head towards Baldurs Gate.
Oh, and as some othr people on this board have already said - you are only just over half way through....
Enjoy!
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