Ayatorious we are! Capell is alone at the moment and you start at 2nd floor of the castle. Descend to 1st floor, try to walk out into the town and game switches to scene with Edward once you approach his room. Walk out into the town and enter the inn.
Approach the doors of all three rooms for: scene with Rico & Rucha, scene with Eugene, scene with Michelle. Exit the inn and head for the archway, which lead to Oradian Mountains for a scene with Balbagan. You will not be able to count on him for a while. Gustav is another chr who can break rocks when Connected.
Return to the castle, ascend to 3rd floor and enter the balcony. You'll get FANTASIA NOTATIONS KI.