They avoided dealing with the devil.
They didn't actually ask all those questions listed above - those were just the things they were tossing around while trying to decide what to ask. They did ask the consequences of stepping into the circle, so they got the rhyme that led them to correctly guess it was negative level(s), which could be healed by a Restoration spell.
They discussed who should step into the circle, and the group didn't want the paladin doing it, because he already has a negative level right now, from Black Magga. You can only heal one of those per week, and he was the only party member who got two of them from fighting her, so only one has been healed so far.
Also, I try to be a little lenient about the guy playing the paladin not acting self sacrificing and heroic at all times. The player didn't actually choose that PC. Someone else made the paladin, then left the group after a couple of sessions, and we kept the character around to fill out the group, so he's now being played by someone who didn't really want to be a paladin. He's not blatantly violating any paladin codes or anything, but he's not overly gung-ho about sacrificing himself like Latrecis seems to think he should be.
Also, I intentionally played Avaxial a little more sane than described in the adventure, and had him hold out trying to negotiate, because the PCs were playing along, and it made for a fun moral dilemma to put them in. I think everyone enjoyed it.
As for relying on Divination too much instead of knowledge skills, shouldn't that be the benefit of taking the spell? If they're willing to spend the money (it's 25 gp per casting), time (10 minutes per casting), and spell slots (4th level spell), then shouldn't they get the benefits? And even though I was thinking some of my clues are too obvious, I've been amazed that the group still doesn't always understand them entirely.
In the end, the party oracle stepped into the circle, and rolled high on his Fort save, so he didn't even get the negative level. So Avaxial is ash, and Turtleback Ferry is saved.
And even though they already knew about Hook Mountain, they decided to investigate the fey connection to Fort Rannick's leader first. They're waiting for a messenger to return with a scroll of Raise Dead for the currently deceased party cavalier before heading to the Hook, because they figure it'll be tough, and they want the extra front liner. So that'll be next session.