[h3]Duchy of Pelgaid, secluded pond[/h3]
Even before Jillian spoke her audible confirmation that the contract was signed and the deal irrevocably finalized, Gerald's gaze had left her and wandered, seemingly turning to their surroundings at random as though he could see something that was not of the mundane world. Behind them, almost forgotten due to their silence and lack of participation in bargaining, Renold and Crone showed signs of discomfort as well. The old woman drew her shawl closer around her as she shuffled backwards, away from them and the Grand Master, with an expression of pure dread in her eyes, and even the great Green drew back his head, staring at the demon with obvious fear.
When Gerald had made his mark upon the contract, the magic contained therein had already started to manifest, and the true power of this creation of the Grand Master began to make itself evident; before the warlock's eyes, though it would be invisible to Jillian until she signed as well, countless hands forged of bloody shadow emerged from the demon's visage, surrounding but not enveloping him, simply reaching out as if to seize the entire world and drag it towards him. The Grand Master, though still and motionless, had eyes that burned like actual fire. His robe seemed as though it was twitching on its own, as if the fabric itself was a living mass simply forced into the shape of a garment, which was normally dormant but now, as a crime was being committed - as a demon lord and two mortals committed taboo by abusing their freedom to break the boundaries that had been placed upon them - it was awake, writhing... in agony or ecstasy, or both.
The contract in Jillian's hand curled up and vaporized, and the ornate quill with which they had signed seemed to simply dissolve and fall away into dust to be carried away on the wind. The hands of the Grand Master's dark, wretched desire, now visible to both of the signees, seemed to darken the sky and blot out the rest of the world, trapping them in a perceived inescapable cage with their new business-partner.

"Yessssssss," the Ancient One hissed, throwing back his head and breathing deeply, seemingly momentarily lost in excitement. "The deal is made; my limits have been redefined. I am bound, but also freed." He straightened and looked at them directly. "I belong to you, now, and you belong to me. For as long as the contract exists, until it is fulfilled, we are connected."
He sighed, and his robe seemed to calm again, resuming its role as lifeless cloth. "The one who is the source of the Withering does so from the Spirit Realm, and rather than spread it traceably in Reniam or traverse the planes to do so, the Withering infects the souls of mortals when they sleep; in other words, you contract the Withering in your dreams. In order to end the Withering, curing the hundreds, thousands even, that are currently dying at its hands, you need simply to defeat the source by shattering its avatar in the Spirit Realm, thus breaking the connection between the demon and mortals, preventing any more magical energy from being siphoned.
I think that covers the matters of 'where' and 'how'." The Grand Master chuckled to himself. "As to 'who'... the identity of the source of the Withering is that of Kevin the Insignificant, though I suspect you know him better as Kreshtaat, the Lord of Darkness."