It turns out that Emperor had no thoughts on peace as his true plan was to use Terra to lure the Espers, and then have Kefka turn all the Espers into magicites. Edgar, while hitting on some girl working for the Empire (heh ^^), found out about the whole plan and escaped Vector with Setzer, Sabin, Cyan and Gau to meet up with Locke and Terra.
Soon after, Emperor Gestahl and Kefka found the three goddess statues. They disturbed the balance between the statues and a part of the earth became a floating island as a result. Kefka then betrayed Gestahl and took the powers of the statues into his own possession. Kefka then moved the statues out of alignment to completely destroy the balance between the 3 statues, causing the face of the world to change. The Blackjack was unable to escape through this chaos and it was completely destroyed while it was still in mid-air, and the whole party was separated, not knowing the whereabouts of each other.