Lina was only bluffing that her powers were gone, so when thinking that Kanzel managed to kill Lina by pushing her at the edge of the cliff (and straight down to Seyruun), she manages to get a sneak attack with a Dragon Slave which does little damage. She then amplify her power and uses the Laguna Blade to kill Kanzel.
The problem is Kanzel's power was holding up the little island, and it's heading towards Seyruun.
Lina and company manages to get down before the island, and Xellos sugests to do a magical amplified version of a Dragon Slave. She does it, and it not only blows up the island but a small piece of Seyruun as well.
At the end, they are worried about Lina, saying that Gaav, the Demon Dragon King is after her and why is she linked to it...