Where is the P stone and how do i get into the desert fortress?

You have to solve the cyclops' puzzle after you speak to the dragon!

The key to the Dessert Fortress is in the Hole by the castle. As your falling it's the first chest you see to the right. You have to use an anti-gravity potion to get over the spikes. After opening the chest use your Teleportation spell to get back to the top of the hole and then fall to the exit so you can keep the key.

You get the P stone after solving the Cyclops' riddle/mini-game. You will get the option to play his riddle after talking to the dragon in the castle and telling him you want candy.