The first thing you'll probably notice about Desert Town is that nobody's here...
Well, except for the Inn keeper, one guest, and one old man in the northeast who "knows all about the town."
The old man tells you that the statue of the goddess is broken, and because of this, the town is experiencing a drought.
He also says the statue is a representation of the Water Spirit, and that the real Water Spirit won't give the townspeople the time of day. Unfortunately, that by itself doesn't tell you how to progress in the story, but it does sort of provide a clue.
A quick visit to the Mysterious Hut reveals that there's a place in the southeast where the spirits like to gather - so our next destination is the Antarctic Plateau.
- T1 - Priest's Deed - in the barrel in the northwest corner of town.