Oooh, awesome, awesome, awesome, Wesley!  This chapter moves along at a very good pace with a nice balance of description and dialog.  Love the imagery of the Temple of Silver and the contentitious audience, especially the discussion around the comparison of Dwarvish lenses vs. those from Aman and the thermodynamic unliklihood of transmutation.  Aulendil is in his element here, and I loved how he fields the questions and challenges.  Spot on.  I also deeply appreciate the fact that you give sutble, outward signs of age to the Elves (and the Wolf in Half-Maia/Half-Vanya Clothing) here.  Very believable in my book.

The emissary continued, "…Curumo, the Cunning, begat me upon a noblewoman of Ingwë’s house. It was no happy union as Thingol and Melian’s was… after strife between them, my birth was a gift that brought no joy to either.

The Dark Muse™ is running around in a tight circle, alternately screaming with glee and horror. :^D 

"He knows more than god, then! There is going to be a king’s ransom of diamonds lost through the floorboards if so much as sneezes! His beard has probably swept up more wealth than—" There was a clank of metal and a flood of blue cursing. “Oh mother of spiders! That hurt!

This was a hilarious scene, esp. the subsequent ribbing on Tyelpo's (sorry force of habit :^D) Tyelpë's part. "Disorganized." Heh.  "Mother of spiders!"  Love it!  Might I poach it?

But this...this is my very favorite bit from this chapter:

So when, in the pursuit of a new method he miscalculated the necessary heat for the coals, it took him by surprise that his error elicited no biting remark on his intelligence or moral fiber.

“Ah!” Aulendil put his hand over Tyelpe’s in guidance. “Close. A few degrees more, it’s a whiter heat for mithril. There you have it. Perfect. Now, hold it there.”  

“I’m sorry, I should have—“

“Eh?”  the Vanya smith blinked in confusion. “No need for an apology, Tyelpe. Goodness, this is your forge after all. You’re doing fine.” He laughed, and returned to work.

Man, oh, man, does that ring true at a deeply personal level.  Throughout my education and career, I have received plenty of compliments but with qualifications.  And even if I didn't say "I'm sorry, I should have" (although I am sure I must have said this literally at times), I know I was thinking it.  [As an aside, I told one of my former supervisors, when he asked for feedback from me, that he should praise his direct reports.]  So unqualified praise is really uplifting and certainly engenders good will.  I can truly get why this means so much to Tyelpë.   This - and the combination of authentic knowledge that Aulendil offers - nicely sets up the dynamic between Tyelpë and Aulendil and how the latter knows exactly which chimes to ring in this regard.  I'm guessing that Aulendil likely has experienced the same.

And I love the artwork!

 Again, nicely paced, very cool world-building and interesting characters.  Man, do I love your Dwarves!

"Not bad by half…" he panted. "…for one so elderly."

"And you neither, for a savage, uncouth Fëanorian."

Tyelpe breathed a laugh. "We had brave, fiery dances. You’d never keep up."

That snippet of dialog represents what I liked overall in BS&S - A & T have an engaging banter with what feels like authentic good-natured ribbing.  It shows (vs. tells) that these fellows are both colleagues and friends.  Also got a kick out-of-the-drunken-dance-scene-making-a-fool-of-oneself-in-front-of-one's-mentor.  I've been there.  Although I didn't go to bed with him afterwards.  Speaking of which...

The erotic scene really worked well!  Again, you achieve a good balance of erotic imagery and sensation along with emotion and dialog.  Actually reminds me of Oshun's treatments of Fingon and Maedhros (that's high praise, btw. :^))  Full disclaimer: if an erotic scene is too prolonged and with just pokes and prods, I get bored as hell and skip ahead.  Yours is not like that at all.  There's something to be said about Tyelpë's character here, notably:

The only words that came easy now were short, and filthy, and he could hear them echoed by Aulendil’s stunning voice, rumbling and deep—telling him how good he was, how perfect, how much he was taking— the same voice he’d heard in the lecture hall, in the forge, and the thought of it was so deliciously sinful.

Great tie-in to the previous chapter and Tyelpë's hunger for praise.

Also liked the descriptions and process of the forging of the Three and how Tyelpë's infused them with the essence of his friends...and their revulsion thereof.  The use of blood magic in the crafting of the Rings was neat. 

And finally the end:

“But I do understand. I know you craved kinship, and affection, as much as I did. You say that Aulendil was not real, but that is also a lie.” Tyelpe choked. “That he was not the whole truth of you does not make him fiction. And whatever you are in your entirety, I will love that part of you that was kind, and earnest, and brilliant, forever. And I am sorry, my friend, that you cannot pull back from this path you have taken, I am sorry that you have chosen the most useless and destructive consolation of all to salve your grief. I cannot bring back what you lost, nor be the downfall you wish to avenge. I am only Tyelpe. And I love you."

Red coals sprayed over the ground as Sauron yanked the hot iron from the forge and drove it upwards through Tyelperinquar's ribs. "Silence! Still your idiot tongue, you disgusting child! I hate you, I hate all your kind, your family, your breed, your species! I will eradicate you from this earth and piss on the wreckage, useless whelp of Eru! Don't you dare speak another word to me!"

Tyelpë drives the hammer home.  And the characterization of Sauron here?  The raw anger at Tyelpë's strike at the heart of the matter?  Oh, yes.  Feels right to me.

*Applauds*  Very well done, Wes!

This is terrific work. The detail of smithing gives it authenticity but the depth of thinking behind it admirable- it's the story I have wanted to read!!

eloquent indeed, vivid and visceral.