I was practicing my levitation spell in the Katta Inn. Perhaps I shouldn't have. But now my character is stuck in the bottom of the screen with only his head showing. Resting means going to sleep where he stands, not going over to the bed. clicking on the chest opens the chest from a distance and no...

I too was frustrated by this. Luckily you can go to options select type interface for dialog and just type ask about bellows, tell about air elemental, etc to access the necessary dialog. To actually challenge him, you have to give him money.