[X] Plan Proxy War, the Goldfish Option (yellow was originally part of @Azel's plan, red are my own adjustments or additions)
-[X] "I am afraid that war is upon us all, regardless of our wishes. The Illithid will not give us any choice on the matter and neither will others."
-[X] Info-Dumping
--[X] Tell him about what you know about the Illithid, their methods, capabilities and goals. Don't sugar-coat it. He doesn't look too faint to handle the truth and if he feels overwhelmed by it, all the better for your position and good to know that he might be not suited to fight this war.
--[X] Do not mention what you know about their fortresses to not needlessly risk information security on that one. Instead, just imply that you know they have underwater fortresses but that you don't know any locations. It's not as if he had any chance to strike at them anyway.
--[X] Tell him what you know about the Drowned God - Illithid connection, including a recounting of the whole Damphair mess.
--[X] Explain your truce with the Illithid to him and that you are thus somewhat limited in your movements, even though you would love to offer more direct aid. Also stress that you are adhering to it mostly due to needing time to prepare for the war. If it were re-ignited right now, the death toll in your realm would be staggering.
--[X] Explicitly warn him about the effects of Bilestone and that it's being spread among his subjects. Also, that throne? Rots your brain. Doubly so if you wore that Driftwood Crown.
--[X] Ask him to share everything he deems important about the situation so that we can better formulate plans and render aid. That includes the political situation and in that regard, we can act more directly.
-[X] Offer Aid
--[X] Give him 5 PfEs and Healing Belts, for himself and those he deems the most in need of mental protection. Also the option to commission more from you.
--[X] Offer to arrange a meeting with the Tritons so that he can strike more bargains with them.
--[X] Offer him to talk with Breath Taker in case he is willing to look into divine aid. The Merling King would not give aid without a cost, but said cost can be paid in the blood of the squidheads. (No need to beat around the bush here. He knows what we are all about, doesn't look terribly squeamish and is backed in a corner.)
--[X] Offer him to buy weaponry from you. Potions of Cerulean Sign, alchemical substances, steel weapons, potentially with +1 effects, the abberation detection pearls from Relath (though don't mention the source, just what they are and that you can provide them).
--[X] You are currently looking into making magic more widely available through minor rituals and will share some of those once they are ready.
--[X] Allow him to commission items at market cost (twice our cost). This means that our crafting time will make us some profit, while commissions we facilitate in extraplanar markets will not.
--[X] Offer him a war-time loan of up to 500,000 IM (the originally proposed 2,000,000 is ridiculous), at a fixed interest of 0.25% monthly (roughly 3% yearly), to be repaid after the Illithid are permanently repelled. The loan can be expanded, if necessary, pending a review of previous expenditures.
--[X] Also give him a bag of attuned sand and a Lesser Three-Eyed Raven to keep in touch.