A neat little critter - the cocoon - spun stone - sounds like it could be used as asbestos, already formed into sheets. This alone could be worth adventuring for.
A good basic plot idea - some of the details are not my cup of tea, but the general premise is good.
What Muro said.
A good starter adventure - especially where conflicts between orc/humans etc is more then just 'they are evil..'
I think this sub could easily be improved by a little rewrite to clarify the last paragraph.