The lost Book of Schuller: Most of the theories I've seen about this relate to it either being a virtual book or something created out of whole cloth by the inner circle. What if we've already seen the methodology for introducing it? When Merlin asked OWL how many other people were discrepancies between Shan Wei's list of colonists and the official record, there were 253. We know that those were spread all over the world. We know that Siddarmark is the only country in the world with a republican tradition. We also know that certain "splinter factions" exist within the church hierarchy; the Sisters of Seijin Khody are the most prominent example. What if the lost Book of Schuller is just that, a collection of writings by Schuller that have been "lost" for centuries. They are protected in a small, out of the way convent or monastery by a small faction, quite possibly one of the branches of the Wylsyn family.
State of the World: Charis will have stopped growing. It will largely be an empire of islands. The only significant area I can see being added to Charis before the next book is Raven's Land. Dohlar will have stabilized and come to a peaceful but tentative settlement with Charis. The old king abdicated when his son reached the age of majority. Siddarmark will be stable in population, and possibly looking to expand it's borders back to fill in what they lost in The Sword, and maybe swallow up Silkiah. Southern Harchong will have declared independence and established a new government that is more oligarchy than republic or monarchy. Desnair is finally settling out of a civil war that has actually turned it into several smaller duchies, or a new leader will have risen up to recombine the competing families under the banner of new empire of Desnair. Norther Harchong is still deep in the grips of the years of chaos following the violent uprising of the serfs and slaves who are being supported by Southern Harchong and the Charisians. Nothing has changed in the Temple Lands.
Charisian style "innovation" is spreading like wildfire, and the church is struggling internally to come to grips with how to contain it while not investing too much power back into the inquisition. The new grand inquisitor is either a Wylsyn cousin or a counter-reformist that is building a power base.
The Return: the second arc is going to need a primary antagonist. We can assume that Grand Vicar Duchairn will institute policies to keep power from concentrating in the hands of a very few (ala the Go4), without stringent checks and balances. Besides, that bad guy has been done once, the new arc needs a new bad guy.
Enter the return of Chohiro and the Dawn Star.





Our heroes have to get access to the temple to wake up Schuller's "final defense".