The Ambush at Old Blind Pete's House was an attempt to capture Haley Starshine in the secured basement of the house, where Old Blind Pete sold her out in order to have his eyes regenerated. With Belkar incapacitated by his activated Mark of Justice, Haley had the Cleric of Loki Pete had brought prepare a Sending message for Durkon Thundershield, informing them of their location and warning him to bring diamonds for resurrections. Haley then went to hold off the guild long enough for the cleric to finish the spell, during which she was incapacitated by her long-standing rival, Crystal, her bow broken in half.
Finishing the Sending spell, the Cleric of Loki cured Belkar of the Mark as the door to the room came down. Back in action after receiving a vision of sorts from Lord Shojo, Belkar proceeded to slice and carve his way through most of the guild with the cleric's assistance, reaching the front door where Pete was, now with his eyes healed. Leaving Pete helpless on the ground, he convinced the cleric into killing him in revenge for selling them out before the two parted ways, Belkar returning to help Haley and Celia and the cleric going out of town.
Arriving in time to save Haley, Belkar held both Crystal and the guild leader, Bozzok at bay while Celia took Haley to safety where she gave her a few healing potions. Reaching Pete's old Den, a rejuvenated Haley armed herself with a new Icy Burst +5 bow, returning to face Bozzok who had chased the pair. Meanwhile, Belkar easily dispatched Crystal, leaving her at exactly 0 HP before returning to Haley, the two now flanking Bozzok.
However, meanwhile Celia was kidnapped by the remaining guild members and taken into the Den, where she managed to convince them to reinstate Haley into the guild at the cost of her retroactively owing most of her money to the guild. The deal put an end to the bloodshed just as Haley was about to execute Bozzok.
The aftermath of the skirmish ended with much of the guild deceased or incapacitated, Haley returning to her old room in the guild headquarters and them helping retrieve Roy's body from Hieronymus Grubwiggler, after which Crystal was murdered by Haley after coming out of the shower. Bozzok kept a grudge, however, and paid Grubwiggler to make a golem out of Crystal instead of raising the dead guild members. The golem ambushed Haley, Elan and Bandana Secundus in Tinkertown, where she was eventually convinced to turn on Bozzok, whom she brutally killed after Grubwiggler teleported away. Crystal herself was disposed of shortly afterwards, being dropped into the Timkertown Municipal Waste Disposal Facility.