Oh man, is this a joke? I'll clue you in later, but first, how to solve the puzzle the way you're supposed to. You are to visit all the stone heads in the castle. You will be told "The first is in flower, and also in bloom. The second is in grave, and also in gloom. The third is in chamber, and also in room. The last is in wef, but not in the loom." They are referring to letters. Pick out a letter which flower and bloom have in common, and do the same for the next two pairs, then pick a letter from the word "wef" as the final letter. You're left with a four letter word. If it doesn't make sense, try again until you get something that does.

However, there's a much easier way to find out how to get into the dungeon. Going there, you will be asked: "What manner of creature once pillaged this castle?" I laughed when I saw this. You see, all you really have to do is check Corak's Notes, and the answer's right there: OGRE. Looks like someone at New World Computing goofed.