The Blindness of the Gods - Act 2 Story Quest
The Blindness of the Gods is the first story quest in Act 2 of Titan Quest and technically the final quest in Act 1. Speak with Imhotep (pictured above) after arriving in Egypt to complete the Act 1 version of this quest and begin the Act 2. For the first part of this quest you will have to travel through the Rhakotis Slums to find the Rhakotis Library.
Side Quests In Area:
The Family Heirloom (Rhakotis Slums)
Inside of the Rhakotis Library near the entrance you will find Neb-ka-n-ra whom you can speak with and update the quest but it is not required to do so. Travel to the bottom of the Rhakotis Library where you will find Scarabaeus - the first boss of Act 2.
Scarabeus is a pretty straight forward fight and will be easy so long as you have adequate Poison Resistance to take the hits. He has two primary attacks, the first is to summon little scarabs that will assist him in battle. He can have up to a total of 8 little scarabs with him. The second attack he does is a volley of Poison bolts; aside from the damage they do to you they'll also dramatically slow your Attack Speed.
Even if you have high enough Poison Resist to not take much damage from his attacks, it'll still slow your Attack Speed. Once you've defeated Scarabeus go into the adjacent room and pick up the Scroll of Invocation from the statue. This will update your quest and open a door for you that lets you proceed to the next area.
There will be a few more areas for us to go through before reaching the next town. Along the way there will be a few Side Quests to complete too; the most important one of the bunch of Beast of Legend. This quest will grant you a permanent reward of +2 Skill Points each time you complete it on a new difficulty.
Side Quests In Area:
The Beast of Legend (Wadjet Canyons)
Plight of the Nile Farmers (Village of Sais)
A Promethean Surrounded (The Lower Nile)
Lowest of the Low (Beggars Quarters/Memphis Outskirts)
Next to the Village of Sais you will find a Portal (Lower Nile Portal) and slightly north of that you will find Thuti standing outside of the destroyed Temple of Ptah. You can speak with him to update this quest but it isn't required. Continue along the path and make sure to complete the A Promethean Surrounded quest as well as Lowest of the Low. You'll pass by both of these on your way into Memphis.
Once you arrive in Memphis speak with Imhotep to complete this quest and begin the followup, The Invocation.