While Ben hesitates and Pud backpedals, Matilda storms ahead. She slips out the window, down onto the top of the log, across the branch-choked "roof", and out onto a secondary limb. But as she reaches up and tries to pull herself up onto the balcony outside the Textile Mill, she slips.

Matilda: Make an Acrobatics check.

Quote from cbaer8 >>

While Ben hesitates and Pud backpedals, Matilda storms ahead. She slips out the window, down onto the top of the log, across the branch-choked "roof", and out onto a secondary limb. But as she reaches up and tries to pull herself up onto the balcony outside the Textile Mill, she slips.

Matilda: Make an Acrobatics check.

 21

If Pud saw Matilda steam ahead and climb out the window, he would have brushed aside the debate and run off with her. 

acrobatics check: 2 

Pud struggles to gain a sure foothold on the tree’s exterior. He curses his wonky leg as he slips and stumbles out the window.

Matilda falls ungracefully directly on the hard ground in front of the wooden horse, taking 6 bludgeoning damage.

Creaking softly, the rocking horse moves back and forth as it studies Matilda carefully where she lies on the ground. Peeling paint covers its limbs, and its rocker is thick with moss. A rictus grin is painted on its face.  A circular depression can be seen on its forehead. Nearby, next to a protruding root, is a painted wooden box three feet on a side. A crank protrudes from one side of it, causing it to resemble an oversized jack-in-the-box.

The awakened tree is also here. It rushes to grab Matilda.

But before anyone can react, Pud drops like stone between them, taking 3 bludgeoning damage.

Everyone: roll initiative!
Tree: 3
Rocking Horse: 2

Ben:

Having followed along as the others decided to go this way, Ben is actually doing a reasonable job of keeping his balance. Suddenly, both Matilda and Pud fall and Ben can only look on helplessly as they fall.

Initiative:  4

Initiative- 11

Matilda rolls to her feet and pulls out her blades hacking at the tree limbs.

Attack: 20 Damage: 9

Attack: 24 Damage: 3

As she does so she cocks her head at the rocking horse....something about its head...

Investigation- 10

Initiative: 16

Pud lands with a heavy thud and springs up immediately at the sight of the animated tree. As the tree lunges for Matilda, Pud utters an arcane incantation in a harsh, raspy language (goblin) and conjures are roiling globule of acid and hurls it at the tree. He then takes a few steps back, creating some distance to dodge Matilda's flurry of blades. 

He looks up, spots his clockwork hummingbird fluttering above and commands it into action. "Rizzo! Scout the area for threats!"

Action: cast acid splash at the tree. Target must make dex save of 15 or take 11 acid damage.

Move:  Step back a few paces creating some space between the tree and Matilda.

Titaani goes to follow the others, only to let out a horrified gasp as Matilda falls. "No!"

Initiative: 23

Titaani's action:

If she needs to, Titaani is going to move to where she has a line of sight, and mutters a few words in gnomish. Instantly, a burning, purple bonfire erupts where the tree is standing. (create bonfire - the tree will need to make a dexterity saving throw or take 15 fire damage). 

Ben:

On his turn, Ben climbs down and moves to place himself between the angry tree and Matilda.  If he has time, he will equip his shield and take up a defensive posture (Dodge).

Athletics to Climb down:  19

He looks at the rocking horse and notices the indentation on its forehead where a horn might have been, saying to it uncertainly, “Elidon?  Is that you?”

Matilda stands and defends herself as the awakened tree rushes forward to grab her, hitting it twice with her sharp cutlery, slashing through its bark with two deep gouges.

Glancing at the rocking horse's head, she can see that it looks like a wooden horn once protruded from the round depression in its forehead.

Pud hurls a bubble of arcane acid at the burly tree. It clumsily tries to step aside. DC15 Dex save: 5
Rizzo flies up and begins to patrol from above.

Titaani glares at the tree, and purple flames erupt around it. Alarmed, the tree tries to avoid these as well. DC14 Dex save: 2 

Ben clambers down and addresses the rocking horse. It turns toward him, grinning, but does not respond.

Slashed, scarred with acid, and now blooming in harsh purple flames, the badly-burned tree makes a sluggish dash toward the river.
Matilda and Ben may have an opportunity attack if they wish.

Ben:

Remembering how another such tree clubbed Horatio, Ben hacks at the retreating tree with his Longsword, trying to end its threat.

Longsword:  Attack: 8 Damage: 5

And with that, the tree collapses, still aflame. It burns in a purple bonfire, now just smoky, sputtering green firewood. 

The rocking horse continues to confront you with tense, deliberate actions, but it does not yet attack.

Everyone may act.

Titaani jumps down (acrobatics: 14) and smugly warms her hands over the fire. Tiny will follow her, but sniffs curiously at the rocking horse as he does.

"Be careful with that thing, guys," Titaani warns, glancing over to where the others are. "I still don't trust it, to be honest."

Horatio falls from the house (Acrobatics 9) with a moan, but quickly jumps to his feet in case of further threats (Initiative 16). "We can stop skulking about and falling, let's just do this!" He gestures, pointing at the burning tree. "I tell you, it'll be better in the long run if we just hunt down the remaining defenders."

Ben:

Carefully sheathing his sword and putting away his shield, Ben says, “If that is really you, Elidon, know that the hag has fled and your mate Lamorna awaits you at the Wayward Pool.  We would help you if we can.”

Persuasion:  14

Quote from Scott_R_Simmons >>

Ben:

Carefully sheathing his sword and putting away his shield, Ben says, “If that is really you, Elidon, know that the hag has fled and your mate Lamorna awaits you at the Wayward Pool.  We would help you if we can.”

Persuasion:  19

" So where is his horn?  Wait....didn't someone tell us about....did they?"

Intelligence- 14

"Elidon?" Titaani asks, confused. "That's just the hag's rocking horse. And Matilda is right, it doesn't have a horn so it couldn't possibly be a unicorn...could it?"

Pud looks to the group and says "Maybe it's cursed or bewitched by some sorta spell? Let me try." He tucks his walking stick under his armpit and cautiously walks over to the rocking horse with his hands open wide showing that he comes in piece.

He looks the rocking horse square in the eyes and says "Hey there...Elidon, is that you? I'm Pud. I used to be a captive of Granny, too. But my friends here saved me. And we wanna help you too." 

IF the rocking horse does not act aggressively towards Pud, he will continue to approach and place his hands on the rocking horse and cast identify as a ritual in an attempt to gather any information about what spell or curse might be afflicting them.