... you just have to deal with all the guards that come rushing over.Regarding the password, you worked on the right lines at one point, but there's something you haven't quite spotted yet 
. I wouldn't worry too much about it just at present, though. Even when you find out what the password is and where to use it, you REALLY would not want to go where it would take you until you become more advanced - and until you get better weapons.
Make a note of the "N W N E S" - you will need it in another place.
Incidentally, it's good policy to keep Wizard Eye up and running for as long as you can.
And a final hint - when you "Explore", "Search" or open a chest, there are some places where it pays you to save your position before you do it, so that if you don't think much of what you find, you can try again. (In these Taverns it's called "mephistoing" after the guy who first popularised it.)
Doing that in the mountains across the strait north of Wildabar will give you 3 obsidian weapons. Very useful!
