Are you running Windows 2000? If so, this is a common problem with that O/S. Here's a solution:
The fix is to uncompress the town video file using a free utility called: Virtualdub:
Go to the following site:
VDUB
Once you're there, download Virtualdub, install it, and then load the file "townmsk2.avi" from the "Townavi" directory in your Wizards & Warriors folder into Virtualdub. Save it with the "Save as old-format AVI" option with a new file name. You will get back a 32MB file. Close out Virtualdub and then rename the new file townmsk2.avi (over the old file). Do the same procedure to the other two town mask files.
If you're not using Win2000 please let us know your O/S and other system details.
Xignal