Don't believe what you read, dispatch a team to investigate.

This seems like too much of a coincidence. Everyone but Countess Marissa died and the body reportedly looking like Marissa burned removing any evidence that could confirm the story. Also what type of demon was it, The Countess was not clear on the details. That could be of vital importance in determining future risks. You cannot delay your quest any longer or risk one of the other Clutches getting bored or ****, waiting on Butrexx and take over, then your charge of leadership will turn into an all out war.

You go talk to Lord Gilbert and show him the letter. He advises you to send mages and holy men along with some soldiers as an escort to verify what they can about the message. He goes off to organise a regiment of men for the mission. You visit the mage guild and temple. At the mage guild, you recruit the 3 mages most familiar with demon magic. They inform you that they have picked up a slight trace of demonic taint on the letter. This can mean only one thing, your Knights valiantly died taking down an extremally powerful demon, in which case there will be an unmistakable mark left in the place it died.

Next, you go to the Temple. You consult with the priests and clerics there, showing them the letter. They tell you that not many demons can change from so quickly or at all, most tend to possess their hosts. Those that can transform nearly always revert back to their true form. This confirms the mages' suspicions that it was indeed a powerful demon. They claim that going and listening to first-hand accounts and with the mages analysis of the demons mark they will be able to determine what type of demon it was. you choose their top 3 priests for the job.

You can't help feeling that something is missing from the information the mages and priest gave you. However, you can't worry on that now you have a quest to compleat to assert your rule on the lands of your queen. You gather your champions, Butrexx, Sarah and your guard and set of the next day

(you hope you made the right choice, but for now, you unlock the Luxem-is-Fucked-o-meter which should go up by 5% each chapter until you get news Luxem is saved or it reaches 100 and Luxum falls to demons creating new problems)