Before I go and rescue the Baron's daughter, kick Baba Yaga's arse and save the valley, I'll first need to prepare, and chief amongst those preparations is sorting out a dispel potion! While wandering the valley, you come across a white stag. Following it leads you to a secluded and protected glade, which is inhabited by a Dryad - a sort of tree/nature spirit.
The Dryad asks you if you're a friend of Nature (and when a Dryad asks you if you're nature's friend, you say YES!). To prove it, you're asked to go and fetch a seed from the rare Spore-Spitting-Spirea plant, an easy task only a few screens to the north. This being one of those class-specific tasks, you can get the seed by a few methods (the magic user even gets two different ways). Upon retrieving the seed for the Dryad, she tells you about the dispel potion and donates a magical acorn for it. The potion can be made by the Healer, so you need to go gather the ingredients.
The ingredients include: A Magic Acorn, Green Fur, Fairy Dust, Flying Water and Flowers from Erana's Peace. The acorn you get immediately, and the flowers you should already have retrieved by now. The rest of those ingredients require a little leg work, but can all be accomplished in a day (with the Fairies only coming out at night).
The Meeps Peep is where you'll find the Green Fur, and for Magic Users you can get yourself a spell scroll too (Detect Magic). The Green Meep is a friendly fellow, and chatty to boot, but doesn't like you getting too close.
Finally, you need some flying water. This requires a little lateral thinking, or observation (or both I guess). One of the scenic locations in the beautiful Spielburg valley are the Flying Falls, a waterfall in the south-east of the map. The water there seems to jump, or fly, off the rocks. One flask-full later, and you're all set!
Worth a look while you're there is the door by the ledge on the rock face. Turns out it's the home of Henry the Hermit, who is one in a long line of successful hermits, and will happily talk at you until you can't take any more. For a little food and some games of cribbage, he'll let you stay the night, and he'll also let you have a spell scroll if you've got the inclination (Trigger, which triggers magical things).
A quick return to the Healer to mix things up, and you have in your hands an exceedingly valuable, single-use Dispel Potion. Now you'll be able to tackle part three of the counter-curse: Rescuing Elsa!