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I had the same problem for a long time.......first, Eleni will not join you until you are at about level 21.  It is imperative that you have her on your side before you proceed since her skills are far superior than Rhen or Lars.  Fight the crows, return to the academy, sleep to restore health and mana, buy more mana at the shop where you exit, continue to fight the crows, etc.  When you have enough power Eleni will join your party. Now you must reach level 30 which I did again by fighting the crows which  gave me the most money and powered me up fastest - when your mana grows low return to the academy, sleep to regain health and mana, buy enough health and mana to go with you before you leave the academy. this takes HOURS before I and my party finally got to 30.  Had to repeat this procedure about 4 times.  It takes HOURS!!!!!!!!

So you have done two things:  1) you have Elani in your party and you are all at level 30 or higher.............Return to lands end.  You will need to retrieve two items.  In a cave in the upper left side contains a bone you must retrieve.  At the end of this cave (or another one) you will find a chest with pommogranite seeds.  You need both.  In another cave to your left you will find a boat with an altar in front.  You must touch the altar where you will see the message "I think they want us to leave something."  Exit the cave.  Proceed to your right to an area where there is a dog standing at an entrance.  You have to give him the bone to pass.  Then you can give the lady inside the seeds to plant.  Do as she says and leave the area a minute.  Go back and pick the grown plant.  Go back to the area with the boat and place the plant on the altar.  You can now get in the boat.  MAKE SURE YOU HAVE ABOUT 5000 POINTS WORTH OF MANA TO SHARE between the 3 of you.  You are about to encounter some tough characters.  It took me a while to find the right tunnel, but I think in the second cave you encounter the blonde sirens is a tunnel.  This leads you to the character you fight for a special orb.  Go back the way you came and return to the boat area.  You need to take this orb to the "castle" located in the upper right corner of the land.  When you present the orb to the frozen druid he will unfreeze and give you a skull.  AT LAST!!!!!!!!!!!!!  Take this skull to the place with the door that is blocked in the previous land and place it in the hole on the right side.  You are now about to enter Halloween Hills.  Good luck.  I am there and still trying to figure out the next steps.