SEI is the imperative. For example, 'Sei ruhig!' = Be quiet!
(No further thoughts on the clues yet, I'm afraid).
And Blue Mountains is apparently wrong, so I didn't have everything right there.
Hang on ... there's something else blue. Two wizards. And they went into the EAST.
Is the answer BLUE WIZARD(S)? Their actual names don't have the letter required, as far as I can see.