The Disappearing Dwarf by James P. Blaylock

Professor, Miles, Bufo, and Gump. Stick-a-bush elected to stay behind. He assured the rest of the company that he was itching to be ‘at’ the Dwarf, but it was almost time for him to journey to Seaside with the spring produce from the family farm and return with baskets of smoked fish.
    Twickenham and Thrimp were anxious to give them a lift in the airship as far as the portal in the White Mountains, but they were anxious to go no farther. Clearly, the rest of the company could get on well enough without the two elves who, Twickenham pointed out, had done little that past twenty-four hours but eat up the Squire’s food.
    So it was settled. The company piled aboard the elfin ship along with a few meager supplies. They decided to carry little along with them, trusting that the country of Balumnia, wherever it lay, would understand the nature of a gold coin.
    The airship rose silently skyward. Jonathan watched through the window as the ground below receded. Myrkle Hall looked like a cleverly built toy amid the surrounding green of the meadows. Orchards became visible, laid out in neat rows beside fields of strawberries. Forests crept along over the hills toward the River Oriel, and when the airship was almost level with two white puffy-cheeked clouds, Jonathan could see the river itself off in the distance, a tiny ribbon of a river running away down the valley toward Seaside. Smoke from what must have been Willowood Station rose in the northeast, and beyond that stretched the dark expanse of the Goblin Wood.
    They whizzed away east, finally, toward the White Mountains, leaving Myrkle Hall and the orchards of the linkmen far behind. The mountains themselves seemed to grow as the airship ascended and flew into the dawn. Jonathan had heard any number of astonishing stories about the White Mountains, stories about the tribes of mystics who lived in the shelter of high valleys, cut off from the outside by perpetual storms, sharing their caves and huts with snow apes and white tigers. Elves dwelt in the foothills, spinning elf silver and glass into wonderful toys and building fabulous magical machines like Twickenham’s airship. Dwarf villages stretched along the mountainsides below the mouths of deep caves. Almost no villages of men could be found, though, either on the slopes of the foothills or at the higher elevations. It was rumored that there was something magical about the White Mountains that drove men mad, as had happened to the mystics.
    The airship followed the slow curve of a little green valley up the foothills. The mountains were heavily timbered and ran with creeks and rills and waterfalls that tumbled along, now visible, now hidden beneath the thick woods, finally cascading out of the edge of the forest to flow into a rushing stream, white and green beneath the morning sun, and falling away down the valley. One hill seemed to give rise to another, and where the one humped and leveled for a space, the river slackened and pooled up into little lakes before tumbling over another crest and dashing away again. Along the banks of these lakes were timbered dwellings that sat so placidly among the surrounding meadows and trees that they were no less a part of the landscape than were the rocks and the woods and the river itself.
    High in the mountains the river was considerably smaller, but what it lacked in size it made up for in energy as it raced along over the steepening slopes. Twickenham circled once over a cluster of cottages, and a group of elves surged out onto the meadows around them, waving up at the airship in the blue sky. Sheep and cattle wandered about on the hillsides, and it occurred to Jonathan that the whole scene below was what might be called idyllic.
    In a few minutes, the cottages and the elves fell away behind, and shortly thereafter the forests became less dense. The trees seemed to be shrinking and growing sparse until finally there were only a few scattered and lonely junipers, twisted by the winds