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If you want the snake figurine, use the key from Kreug, go back down to the serpent holds near the entrance, dive down through the grate, kill the unholy filth, select your smallest character, follow the tunnel to the end and the serpent figurine is in the chest at the end.
Make sure you save before diving down because when I was playing, my party got stuck in the narrow tunnel and shrugging left right didn't always solve the problem.
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