Welcome to Vampyr's Castle
and to your dome!!!! [sic]
In order to reach the basement you must first talk to Dalagash on the upper floor. This will remove the two blocks to the north of the stairs leading down. The blocks will stay removed if you exit the area.
There is a wandering, non-aggressive wolf pack. For whatever reason.
Curiously enough there seems to be an unused jail/dungeon in the lower right corner of the basement. There's a stairs leading up but none leading down. Using Wizard Eye doesn't reveal much.
The red stuff in the basement is Lava which will do around 10 damage every tile you step in. Important to note: if you start a battle in lava when you finish you'll be hurt by the lava again.
- Evil cleric