If there's no practical means of disguising the transportation of the egg, Kastix will ask who wants to carry the egg and cast Invisibility on them which should use egg invisible as well on route but will drop it when they arrive at their destination. Also try to get the party to move with invisible guy in the middle. 

(I think we hesitated to intervene because he had been so insistent that we would get in trouble, and I thought we would for sure get framed. Then the cops showed up right at the end anyway before we had a chance to investigate. Had no idea that was Hemeth...that changes...a lot.)

(invisibility is probably best idea for the egg. Sekkar had been carrying the egg, but obviously someone else can. I think DM said Zeno was helping carrying Gorlak.)

Oops, sorry if I spoiled that. I recall dropping a few hints about the victim having only one arm, and I recall someone expressing concern for Hemeth.
Retcon: Gorlak mentioned something as a taunt to the group, knowing that Hemeth had been assassinated and also knowing that this group had arrived at Gracklstugh with Hemeth.

Cool, we will go with Sekkar and the egg being invisible.

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In a matter of moments, several duergar dragon-priests emerge from the nearby chamber, including Gartokkar Xundorn, the head of the Keepers of the Flame. You have returned, he says matter-of-factly in Undercommon, but holding back his anticipation. Did you locate the Grey Ghosts? Have you discovered the source of their magical disturbance.

(In case you need a reminder, or for the benefit of Pax, here are the links to the posts where you received your quests from Themberchaud and from Gartokkar)

(Guess we forgot about Hemeth loosing his hand - for the better part of the journey he was fine, and with eight more days to the meeting there was no reason to worry about him just yet. It does change many things.)

Do not think Sekkar can just shake off invisibility? He will either wait for Kastix to remove it or until the group is inside some building, and preferably in front of the dragon himself.

(Poor Hemeth. We never got to really know ye.)

Rhayna is tagging along. A little bit in la la land, thinking about the cave that she wasn’t able to explore further, and also wondering what happened to the two headeaded ettin from the same cave.

Kastix can drop the invisibility at a moment's notice but He think it's best to keep knowledge of the egg seperate from the dragon priest.

No objections from Sekkar - the egg was meant for the dragon.

Pax looks to the group, then speaks up, “Yeah, hi. I helped them. We have answers but our first order of business is to report to the dragon. Please show us the way.” 

Kaylyn raises a hand and steps forward as they are approached by the dragon priests.

"Greetings Gartokkar.  We have indeed returned.  However we must speak to Themberchaud first.  May we pass and speak to the dragon?  He has requested an audience with us and we do not wish to keep a majestic red dragon as powerful as Themberchaud waiting.  I am sure you understand how he may not like to be kept waiting.  Please allow us to pass.  In time we will d o our best to explain what we have learned."

Gartokkar seems ready to object and a score of dragon priests begin to converge menacingly around the group. But then a mighty voice booms from within the nearby cavern: Gartokkar, nech prechádzajú! Rád by som s nimi nerušene hovoril. (Kaylyn and Sekkar understand the speech to mean "Let them pass, I wish to speak to them undisturbed") The priest glares balefully at the group, unaccustomed to having his authority undermined in front of surface-dweller rabble, but with barely-disguised disdain he makes an obsequious bow and panderingly says in Undercommon: O favoured of Themberchaud the Mighty, I eagerly await your return from audience with the Wyrmsmith. Then we shall speak.

The priests stand aside to allow the group to enter the cavern. The dragon's hot breath and dread presence is felt before the gargantuan shape comes into view. Even those who beheld the red dragon previously feel as awed as before, but for those seeing for the first time, the sight is riveting. The dragon's bulk fills much of the cavern, perhaps even more so as the mighty creature is clearly overweight. One would be tempted to wager it would have difficulty getting airborne, if they hadn't seen it already flying over the city and breathing fire into the forges. What is somewhat underwhelming is the small pile of treasure on which the dragon rests, seemingly paltry and unbefitting of the legendary tales of dragons' hordes.

Lord Themberchaud the Wyrmsmith raises his head as the group shuffle inside bearing their burdens. He sniffs the air for a few moments and then bellows in Undercommon: Gartokkar! I warned you what would happen if you sent your spies in here. The dragon's nostrils start to smoke and flames lick the sides of its mouth. The reply from outside the cave echoes: My lord, none have entered but those you have summoned. The smokes and flames subside as the dragon brings its house-sized head down to floor level and sniffs again, the heat of its breath almost overwhelming. The head pauses at what most would have said was empty space and grumbles: Hmm, smells more like dragon than dwarf. Who is this that stands before me unseen? In a burst of clarity, Kastix remembers his spell and drops his concentration, revealing the figure of Sekkar standing there still holding the huge egg.

Hmm, what is this now? says Themberchaud quietly, looking at Sekkar and the egg. Where did you find this?

Rhayna has forgotten all about the cave with the two headed ettin by now. She discreetly takes her Journal out, and starts to draw the mighty red dragon.

Pax, a mixture of fear, and anger, stays quiet, keeping her eyes lowered, glancing in awe at the massive beast her eyes doubting any chance of success against it and simultaneously searching its scaled body for soft spots or weaknesses. She stays silent and near the back.

"Pardon our rudeness but you can see why we could not let this be seen until we were sure to be able to present it to you personally," Kastix speaks, "As for where we found this was with Duergar who scurries beneath the city like vermin. How they came into possession is beyond our knowledge for now but we have one we believe to be their leader and he will speak sooner or later," Kastix then whispers to Sekkar, "You may want to carefully put it down and walk back from it,"

As Kastix whispers to Sekkar. The myconids still think it is their duty to guard the egg. They both stay on each side of it. Until they realize no is around anymore, and they slow move to Rhayna.

Sekkar obliged, watching dragon with open curiosity (polite, though). Great, terrifying, inspiring awe and fear - all of these were true and explain the respect with which stories of the clan were always mentioning dragons (never Red, though, Lizarfolk had deals with Black and Green, sometimes). Sekkar bowed and stepped back, allowing others to talk. The prisoner (hopefully still squirming) in the sack would be presented at request too.

Kaylyn steps forward and gives Themberchaud  a bow.

"Gartokkar asked us to look into the strange and powerful magic at work in the area.  He said he knew who is behind it - a group calling themselves the Gray Ghosts - but did not know not by what means they can effect such magic. We did our best to discover this cause.  We followed the messenger Droki and discovered a series of caves below the city.  There we found a duergar named Gorlak who was working with demons to overthrow the power in the city.  They had a black obelisk of unknown power that created some sort of portal.  They also had this egg.  They had a list of those they had killed or planned to kill and were working to undercut the power in the city.  There is, unfortunately, much we do not understand yet.  Gorlak was a double agent working within the city guard and there are likely many others planted within the power structures of the city.  We have Gorlak here to be questioned," She motions to the sack of Gorlak,  "as we also were requested to look into the problem of corruption within the guard by its leader.  We came to you first oh mighty one, for you requested that we do so and we felt this egg was of importance to you and wanted to bring it to you." 

As Kastix and Kaylyn speak, Themberchaud reaches out a huge claw and picks up the egg. Holding it close to his face, he stares at it as he listens. After the tale is told, for a minute more the dragon quietly ponders what has been said, staring at the egg. Suddenly a deep booming noise can be heard, apparently from the dragon's neck, and soon the group realise that the dragon is chuckling! So, he mutters to himself, the last piece of the puzzle falls into place. At last I understand. At last I shall be free of their mind-games, never again to be shackled like a caged beast. He falls silent again for a few moments more, then in a sudden move the dragon crushes the egg with one flex of its claw! Pieces of the stone-like shell fall to the floor, along with what remains of an unborn red wyrmling covered in thick slime, as the dragon drops the crushed egg.

Turning now to face the astonished onlookers, the dragon continues in a low voice. Thou hast done me a great service. I see now the purposes behind these duergar sycophants. With one face they do me obesiance, and with another they work their mind-magic to dull my senses. And then when I begin to grow too strong for their arts, they replace me with another. Who knoweth how many have come before me? No more shall I serve as their forge-slave! No more will I accept these paltry gifts and this token worship. The city shall bend the knee to Themberchaud! As the dragon speaks, each onlooker begins to feel the increasing aura of fear that radiates from the mighty dragon as it starts to shake off the psionic shackles of the dragon-priests and flex its new-found will to rule and dominate.

Well have ye served me, the dragon continues, and so shall I reward thee. Not lightly do I part with my treasures, but henceforth these dwarves will labour to fashion me many more. The dragon turns and plucks three items from his hoard, laying them on the ground among the group: a long ornate red staff with a hint of a flame coming from its end; a necklace with five pendants, each bearing a small coloured bead; and a shield of the finest duergar workmanship, stark and largely unadorned but fashioned with dwarven runes.

Finally the dragon concludes: For one day more I shall pretend to fall under the thrall of Gartokkar and his minions. Then I shall slay them all, burn half the city, and make the people and its king my own subjects. I shall see that thou enjoy my protection in the interim, but I advise thee to depart this city before I next take flight. Leave me thy prisoner. Whatever his role hath been, he is of no import now. I shall have my pleasure with him and then shall he be the first of the dwarf-flesh that I shall taste. Tell Gartokkar what thou wilt but speak nothing of what I have said unto thee. Ask of me what thou wilt and then ye have my leave to depart.

The items:

Kastix slowly and carefully walks up the items, holding hsi head in a bow. Taking them in hand before going back to the group, "Thank you your greatness. We will take our leave of your lordship, leaving the prisoner of course," Kastix turns to the group so he's back is to the dragon and mouth 'We're getting the nine hells out of here now,' 

Sekkar contemplated for a moment the idea of asking the best way to leave the city (and fighting seemingly engraved in his very nature of a lizard the urge to stay and serve the true leader) but outruled both as not viable at the moment.

He bowed gratefully and silently followed Kastix outside testing the sound (in thought) of excuses along the line "the dragon sent us outside the city".

Pax conceals sneers as the group calls the beast 'great one', and other favorable terms, and her grip on Gorlak's ropes becomes crushing as the conversation continues. As the waves of fear wash off of the creature, and it reveals its deathly plan, she drops the rope, her eyes wide.  The baby red wyrm dead, the city to be laid to waste....is this not what's best?  Is this not what they deserve?  She tries to keep her thoughts away from those she passed in the street that seemed only more like normal people.  When Kastix mouths the words, she nods in reply.  Leaving Gorlak to his fate, she takes a deep breath, ready to turn away...but stops. It felt like fleeing to her heart. The thing was angry, and the emotion was affecting her. She had to think for herself.  She paused. What else could this dragon reveal.  Only information.

"I have a question."  She hated how tentative she sounded. She let her anger into her voice, though kept her eyes down for fear of it seeing her hatred, "It is a simple question for you surely. The surface. Where is the best route to the surface. You must know."