Hey bro,
First of all, about your Letter. Thanks for the heads up, we'll keep our eye out for the nasties. Really though, I can't believe you expect me to hide while the fishheads roam our turf. As for the bard, I'll keep an eye on her as well as I can. If she wants our help or not. Two eyes, if possible. Otherwise, Matti [DM's note: halfling rogue 1] will be there. Rissa will make sure of it.
Moving on.
Word on the streets is that Irena's dead. Don't see why anyone'd kill her, she was always so helpful, but it seems true enough. Trust my sources, they haven't proven me wrong yet. Lyle [DM's note: the dude who gave you the tadpole jar] seems jumpy lately. You probably noticed when he tried to stab your friend.
Watch out for the fishheads while you look for She, mmkay? For me? Gold is not everything, and your life's more valuable than heaps of it. Eyes to the sky.
Say hi to Mom for me.
Jallorn
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The code's fairly simple. First of all means that she's coded the letter, and you should find the first capitalized word. That is your X. Check the first X listed in each sentence, or the words right before and/or after it if necessary. Moving on is code for changing the X to the next word listed.
Say hi to Mom for me is a code meaning that you should not send a reply, and she'll contact you in the end.
Eyes to the sky is her sign.
Of course, the rest of the letter could be valid as well.