Suikoden III Lake Castle Thomas Chap 2
Budehuc Castle
Thomas is now more comfortable in his position as lord of Budehuc Castle. To continue the story you are to go to Iksay Village, but I suggest you put some of the newer, lesser used members in your party and go to North Cave to build them up for an upcoming war battle. At the every least, put all the new recruits in your party to at least use their 500+ ability points that they come with, so that they have some techniques.
Iksay Village
At Iksay, you will see a Zexen Councilor looking for Budehuc. You can take him there, or lie and say you don't know about it :). Return to the castle to talk to Sebastian, who says a councilor is coming. If you lied to him it will take a few days of resting before they find their way here, so you can level up your guys and get any recruits you missed in Thomas Chapter 1. One recruit I forgot about was Koroku at Mt Hei-Tou. Take the first path north, then northwest to a corpse and look to the left for Koroku.
Budehuc Castle
After you rest a few days, the Councilor will come to the castle. Because they have funded Budehuc Castle, they still consider it their's despite the Grassland / Zexen agreement that is signed.
Rest up after talking to Muto, and then next day the castle is surrounded. The councilor wants Hugo, who is wanted by Zexen. Return to the mansion to speak with your group, and then Hugo and his group. Return to the town entrance and look for Apple and Caesar. They'll help fix the situation, it seems. Back to the courtyard in front of the mansion.
Caesar has an idea, to get Hugo and friends out of Budehuc so the Zexens have no reason to surround you. After the lengthy conversation, go to the entrance of Budehuc to see Cecile's dummies. Return to the mansion, and go in the side door. Take the next side door and then you will see Muto, Piccolo and Martha. Back to your room, and sleep.
Next day at Budehuc, go to the courtyard and all the groups will be assembled. Before battle, Caesar gives you a 'bundle'.
War Battle vs Zexen Councilor at Budehuc
Hopefully you leveled up Twaikin, Mel, Shabon, Nei, Toppo and Piccolo. These are generally the characters (along with Thomas and Cecile) that end up in the war battle. Twaikin is an absolute tank, and if you had a Firefly Rune (from a Purple Creeper), you must put it on Twaikin. The enemy will take off near 0 on Twaikin. Mel has a high attack and starts on level 32-33. Piccolo might be the key though in these war battles. If you leveled up the Lightning Rune to at least B or B+, he will fry the zexens to the tune of 600 damage each.
There are a few unites of three of the orange Zexens. These are weak units, though the lead can at least do a bit more damage than his underlings. The four-party zexen units come with a Zexen Knight on a horse, but they start off in front so you will likely take out the leader quick to end the fight. These are the most dangerous fights though. The Zexen Councilor just has three orange zexens in his unit, so you can carve him up easily. The enemy will send one unit to attack, but just press the attack yourself with the Piccolo / Twaikin / Mel / Thomas unit, and destroy all of their units. Then send Hugo and friends out to the Grasslands.
You acquire a Counter Ring for a Major Victory here, while Juan goes to Brass Castle.
Budehuc Castle
Next morning, go up to Cecile at the gate. Then leave the town, go to Iksay or something, then come back to Budehuc. Near the courtyard will be Leo and Percival, and unfortunately it sounds like you're still in trouble. But they are prosecuting Councilor Durabum. Thomas father, Councilor Lowma, also disowns Thomas.
It is the last day for Thomas, so when you go to rest you wake up at night. Speak with Sebastian as you go down the stairs, then go down the hallway to the side of the castle to see Muto. Return to your room for a conversation with Cecile, and then that will be it for the night.
The next day, Thomas is prepared to leave. Cecile and friends make an effort to stop him, and Thomas finally comes to his sense. But he knows the Zexens will want war after this.
Sure enough, a new war battle starts. You now have three total units, with one new unit to go with Cecile and Thomas' from the previous battle. Twaikin with a Firefly Rune is still your most fool-proof choice, but Juan and Augustine will now be in the battle and they are formidable themselves. After a few turns, Percival and Leo begin to attack. The problem here is that you can only take off half of their HP, so don't get frustrated when you cannot defeat them. Still, wipe the rest of the Zexens out and the battle will be over.
The party retreats to the Budehuc mansion. Fight the Zexens along the way, with your main party. The second Zexen fight is impossible, even if you get off Piccolo's high-level Lightning Magic. So try to stay alive but you'll take some licks and the battle will be over. Fortunately, some mysterious allies wipe out these Zexens and you have one more battle left. You are weary, but it is only a few Zexen Knights.
Afterwards, the Councilor is in trouble. It seems finally Thomas and friends have earned their independence, with the sale of Budehuc Castle to Karayan Lucia.