Thanks to Hawkslayer for this great writeup!
Ok - start off by heading to Gelidite Library - 69.2N, 17.2W. Inside you will face a small number of fire elementals, and a little bit deeper a few Ice elementals, for reasons explained in the lore =);. Once past the initial part you won't be doing any fighting, so don't worry too much about that. The 1st section of the library is very easy to navigate. There are 2 ruined and burning rooms, each has a very interesting piece of lore. However, one also has a wall you can walk through, the one with the bare wall, opposite the main door. Battle your way down here, and make your way to the Labyrinth portal.
Once in the Labyrinth, you are safe from creatures, but not from a pretty challenging maze. Someone can map it out, or link to a picture of it in dungeon viewer, but the main idea here is to collect 8 pages scattered throughout the labyrinth. There is an empty book at the drop point, once you have wandered for a few hours and found all the pages, you use the empty binding on them, sequentially, to complete the book. I can't help much, and once you get there you'll know what I mean. Until someone is nice enough to make a map, your simply going to have to become very familiar with the dungeon, and remember to scan for the pages using [ and ]. It also helps to drop a trinket of some sort at paths you are you have fully explored, to keep from backtracking too much.
Once you have all 8 pages things become a bit confusing. The books description says to use it on the gelidite dais, which you are able to pick up and place in your inventory for some reason. Instead, give the book to the golem who guards the oubliette. (The golem is easily reached by heading north from the beginning of the labyrinth). He will flag you to enter the Oubliette. This is a one time / character thing, so make sure you know what you plan on doing at this point. Once inside, you can read the notes scattered about, and make your choice. You can either pull the plain lever, and leave Nuhmudira to her fate, (and incidentally give her power to her apprentice, who seems to have planned the whole thing, the entrapment and all), or you can pull the skull lever, and save her. This requires you to sacrifice yourself however, and you will find yourself in Zaikhal with 5% vitae (but no item loss apparently).
Should you choose to kill her, the apprentice outside will thank you, and offer you entrance to a 'training ground' when his master completes it, (next month apparently). Should you choose to save her, perhaps there is a reward as well, but I don't know, I chose to kill her =);, in retribution for killing the Zharalim pledged to her.
