Episode 3 opens where the last one stopped, deep underground with water nearby and lava all around. Basket, Scoti_Garbidis and PsychoSFK want the same thing they wanted last time, only more of it: iron, gold, and if they are lucky, diamonds. The luck never shows up, and halfway through, the team loses something more useful than diamonds.
Buckets and gold
Buckets get passed around so everyone can carry water and lava. One of them already has two, so a spare goes back. The cave keeps hiding pockets of lava, and water turns a stretch of it into obsidian. Zombie noises keep coming from somewhere close, and nobody can find the source. "I hear zombies." "I'm freaking out."
Gold starts turning up in small amounts. "That'll be a gold apple for each of us." A little later the count goes up again: "We're gonna have enough for two more golden apples." Basket still carries the golden apple from the last episode.
Still no diamonds
Chat shows JoethePirate1 earning the DIAMONDS! achievement, which does not help the mood. "We've been actually legitimately caving in the diamond area for a really long time. Nothing." Basket gets an extra iron pickaxe from a teammate, and there is now enough iron for an anvil. Someone has ten flint saved for later. The team still has nothing from the surface, no chickens, so the plan for now is to skip the bow and fight up close.
PsychoSFK goes quiet
Around the eleven minute mark PsychoSFK stops moving. The nameplate is still there, but PsychoSFK has dropped off the team's voice chat. Rather than leave a teammate standing in the open, they wall PsychoSFK in with cobblestone and a torch. Gravel gets turned down, since it could fall and bury the person inside.
Scoti_Garbidis types in chat, "you aren't inmumble :D", and Basket whispers PsychoSFK a one-word hint: "mumble!" PsychoSFK answers in chat that the fix was tried and is not working. There is talk of walking on, but the team decides to wait. "It's gonna be hard to win if we can't communicate." While they wait, someone makes a painting.
Chat shows PsychoSFK leave the game and join again shortly after. This time the voice works. "Are you back?" "Yep." Nobody minds the delay: "It's worth waiting for you."
A dead end
With everyone talking again, the next problem is the cave itself. "What we have is pretty well tapped out right now." One passage leads back up, another is a dead end, and a third climbs somewhere nobody likes. The new plan is to head back toward the entrance, go up to the surface, and look for a different cave.
On the way, Basket mines one more patch of gold. DarthTimmanis posts "60 Minute Marker" in chat, and the episode ends with all three still underground and alive, looking for a way they have not tried yet.