Phase 2
Threnody, operating with a bit of OOG knowledge, both priests are full and 3rd+ level. They've got full body cover, giving them a +10 to AC, i.e. AC:-6. If you hit between AC6 and -6, you have a good chance to hit the unconscious body of your friend, likely killing them.
So you'd have to, in a single round, roll two 20s- one arrow to each priest-, and do at least 10 pts of dmg with each arrow, but probably more like (computing avg 3rd level cleric hp as 17) max damage and just hope they rolled low hp, as I think even rolling max damage (6) plus spec (+2=8) and doubled (16) falls short of the avg.
Yeah, you're about as good as a 1st level char can be with a bow. But that's substantially less than '50% odds', so I'll assume you're lining up.
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Theodore, there's a big glassteel window at the balcony above, as mentioned before. You see only the priests, not your friends, as they're lined up out of your sight essentially right below you, and can hear nothing. So the only knowledge you have of the below is that the third priest is carefully emerging from behind the altar.
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When the gnome runs away, the priests sigh, but decide not to kill your helpless friends. "Look," Thak's priest yells out to you. "Jerry's going to come out and knock you out, so we can go get that gnome. Okay? Jerry, come on out and KO these guys for us."
The third priest, apparently named 'Jerry', emerges from behind the altar, fully healed. The non-Jerry priests still have your friends. No ears have been removed, but the knives are back at the throats. You can assume that, for healing and meat-shield purposes, Thak is at -14 and Az at -9.
"The way it'll work is this. Jerry and... one of you, one at a time, will step waaay over there. Jerry, point for me. No, the other direction. Yeah, there." Jerry points to the cliffside wall, directly across from the cliff ledge, equidistant between you and the priests, and another full round away from anything.
"Then one at a time, you'll each go over there and Jerry will knock you out. We'll start with the woman, then the staff guy, then the other archer, when I call for you. If I call and you don't walk over calmly and get knocked out, your friends die. Woman, go now."
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I don't want to storyline you guys at all. If you acquiesce to the KO, okay, but before I go ahead and advance the game, now that you know the next set of events, I wanted to give you a chance to act. Don't waste your post offering more negotiations unless you think you've got an irresistable offer, as the priests will frown, ignore you, and respond by ear-cutting or friend killing.
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Theodore, please post more actions as well. You'll be able to see the KOing if/as it occurs.