- A great lighthouse will be built
by the children of Ptolemy where
poor people have unstable walls.
- The Tao is the way, but
sometimes one should explore
the opposite direction
- The Eye sees a path in more
than one chalice.
- And Artemis is known to have a
good influence on her twin.
The arcane formula is located in the Hades (Soronis - Great Hall of Propontis). You need the Eye of the Gray Ones. (Third riddle. The Eye is mentioned, and that you have to use it with another chalice. Not a great location hint, but you may have noticed the clickable basin which did nothing, in the Great Hall of Propontis)
To create it, you need three Spell Pieces:
- In the Rhakotis Slums in Egypt. (The first riddle hints at greek myths which say that Ptolemy established a temple at Rhakotis (Wikipedia), specifically the slums, where you have to break a makeshift wall. The lighthouse is mentioned because Rhakotis is basically a location in Alexandria and one of the seven ancient wonders of the world is the lighthouse of Alexandria, which was built by the nation Ptolemy founded. "Children" refers to the people of that nation, or maybe to his actual children or descendants)
- In the Orient in a Cave (Quinba Bamboo Forest). (The second riddle mentions the Taoists. Everybody in the small bamboo forest village mentions Taoism when you talk to them. The main quest leads you southwest, so you have to head in the opposite direction, into the swamp to the northeast, to find this spell piece)
- In the Hades in a Caves (Cave of Artemis) - lever and (Cave of Apollo) spell. (The fourth riddle mentions Artemis, whose twin brother is Apollo. In the game, those two names only appear together as cave names in Celestia)