Oh this is a good one, we get a cursed item, we get a dangerous spell, we get a gory little story, we get some NPC ideas and we get them all tied together is nice neat little bundle.
It could see this as a plot device,
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Mages are dying all over the court, some think a magical attack, others a curse of the gods (or their judgement) but it is really the pocket silk has somehow found its way to magic academy. I picture a final fight scene on a windy tower with the silk blowing in the wind, the PCs trying to grab it safely, the vengeful mage hater trying to let it go or maybe an ancestor Mulgar.
As alchemy was very much a magic and emotional take of chemistry. I don't know if this is alchemy, this seems more like bringing an element of Sci-fi into the fantasy setting. Which certainly is fine in some settings, but this seems to be based on a clear vanilla D&D troll. I would be interested to hear what this community has to say about the realism, physics and chemistry versus the themes of a game. For example clever players may use mend spells to take the natural cracks out of a material such as flint to make it super hard and and sharp. Does this fit with the theme of the game.
At anyrate nice idea, simple, compact back story and easy to slide into a game. You stick in some other animal if you don't like trolls, hydra rations or something.
I am starting on the whole Valermore thread (you should really link these subs via hypertext). This is excellent start, the queen is described simply in terms of her motivations and her actions. There some roughly written parts, such as the teaser...who is in the veil? It is princess, but you start the teaser by discussing the Queen's appearance and then you go to pronouns in the last sentence. The obvious choice for antecedent is the Queen and not the princess.
I also really like that you gave the NPC as a whole character arch, distinguishing between her nature at different points in her life.
Ah yes the fabled sword of dragon slaying. It might be interesting to place in your game world a magic sword of absurd but finite power and then apply all the sword stories on strolen's citadel to it. A sword that had some many different yet similar tales would indeed be ancient and enigmatic.
The text was a little disjointed, and it brings nothing new to the magic sword genre, but I like that you came back four years later to update it.