Once we step onto the teleporter, we are magicked away to the center of Lord British's Castle... without explanation. A book written by Stonegate's cleaner is supposed to be found within Stonegate itself wherein he talks about his duties as given by a ghost named Hawkwind. We know the Time Lord was involved in preparing Stonegate for your eventual arrival as he explains when you arrive, so presumably this teleporter is placed here and meant for you.
When we arrive, we see that there is a guard by a main entrance doors with the Guard room nearby. I suppose if any enemies or dangerous animals came in, they would face significant resistance and an alerted Lord British. We even learn through the game, that the Guardian has other plans for Britannia and does not need to do anything about Lord British. Even if he did wish to take out Lord British and/or his Castle, a swarm of dragons and troops would be more effective than a teleporting in Wyrmguard one-by-one.
We can talk to a few NPCs in the area, who quickly point us to Lord British. The dialogue here definitely shows some weaknesses in presentation, plot execution, and even content. We have, however, learned in interviews from the developers over the years that the dialogue that was written was not iterated upon, at least not every line for all NPCs. Aside from basic proofreading, most lines was kept as originally written, which means that some of the lines were written as placeholder for later revision in either content or phrasing. With the need to get lines to the VO actors earlier in the year, these lines never received complete refinement. Thus we have lines like who are the Gargoyles kept without nuance or rewrite.
What do we learn from these conversations? We find out that columns have arisen across Britannia (not new information) resulting in a decline everywhere and even the Gargoyles viewpoint of themselves and humanity has changed for the worst. Lord British is also uncertain of the cause of the decline and sees a connection with the columns, so he directs us to the column upon asking for our help. We can, in fact, refuse to help, but the dialogue surrounding this choice does not provide any actual agency. In order to progress, we have agree to help, so at least actually help. This hand wringing over whether to help is just a waste of dialogue text and voice over lines, when we should be learning more about what has happened over time. Even learning that LB sent Iolo into Despise alone to check out the column, which we learn from Gweno later on.
Iolo being sent into Despise does bring up an inconsistency in the timeline. All throughout the game, we find out that the columns arose 20 years ago, which resulted in a cataclysm. This cataclysm did destroy several cities and damaged others, so some time did have to pass so that people could rebuild. But, when did the Companions go into the dungeons? It seems like they only went in fairly recently. Other elements in the world imply that the columns rose only within the last year such as the broken glass in the Rune exhibit, the dead farmer from the intro next the column, and even most dialogue implies that the columns are a more recent feature rather than a something that has been present for a full generation. Still, the columns are said to have arisen twenty years ago, so that is what is canon. This does bring up a few questions: Were columns just ignored for 18-20 years before anybody worried about them? Did society and magic decline 20 years ago or was this a gradual process? When did the shrines fall into ruin and how long have then been ignored?
While much of this is not explained, I do think a few suppositions can be made regarding the timeline. The first is that the corruption of Britannia was not instantaneous and took many years to fully corrupt the shrines and the people. Second, the columns must have been left largely alone as their influence was not obvious until more recently with the possibility that their corrupting influence did not even start until recent years rather than the full 20 years. Third, the companions did not venture into the dungeons until recently. All other issues are just inconsistencies due to a lack of polish and critical review of the game for basic consistency.
Even with these suppositions, it still looks like the companions and Lord British were extremely complacent or even stupid to not check out the columns much sooner what with the Cataclysm reshaping the land after the columns showed up.
The conversation with Vasagralem is far better. We learn the gargoyles have become prideful and isolationist to the point of building an underwater domed city cut off from Britannia. We are even warned that humans are not welcome there. We also find out that the gargoyle codex lens is missing along with the Codex of Ultimate Wisdom. We are also told that the Codex is now gibberish and requires the lens to be read, which is a rather notable change left unexplained with the distinct possibility that this is a continuity error. During the conversation, we have a option to ask who the gargoyles are and what the Codex is, which are questions that the Avatar should not be asking. This is the kind of stuff that should be handled either in the manual or throughout dialogue that doesn't imply the Avatar remembers nothing of his past adventures. At least, Vasagralem shows surprise that the Avatar doesn't remember the Codex.
We can explore the rest of the Castle, which is large... largely empty in fact. There are few rooms, many of which hidden behind secret passages. While not the Castle being completely different between Ultimas is not new, this version lacks any similarity to previous versions. We are allowed to talk anything from the castle, but this amounts to few little. Mostly some scrolls of the first circle, which are quite common during the first third of the game, some potions, and a small stockpile of reagents. With the limited inventory space and little need for reagents between Shrine cleansings, the magic lab is the best place to stockpile reagents for later potion brewing and spell binding (which the court mage doesn't remember how to do). There is a small amount of gold, which is enough to train with Sir Keller in one-handed weapons if you have a dexterity boost.
You can find a lot of food here, however, it is nearly useless. While it can make you "heal faster" (a very small amount), it has no effect on strength and you can go the whole game without eating anything since a hunger mechanic was never developed. A common trend among RPGs since the late 90s. The limited healing effect means you are better off leaving the food where it is and only carrying a few of the rather plentiful and more potent health potions with you. Of course, nothing stops you from carrying food and eating periodically during your adventure, there is just no penalty for not eating nor a means of tracking when the Avatar last ate.
With that out of the way, we can proceed into Britain itself and see the decline first hand.