Update: Thanks to everyone who offered suggestions already. You all are astounding! All sections updated with advice given as of 3/3/12. Also added links at the bottom of a few sections to modified versions of the image which may (or may not) help.
Having discovered the highest resolution images yet of Bilbo holding the contract which Thorin and Co. wrote (see end of post), I’ve spent more time than I’ll admit trying to work out what it says. You think Bilbo looks perplexed? I might have had better luck with the Dead Sea Scrolls. My findings are based on some visible evidence, and a whole lot of guesswork. Even so, the truly Hobbit/Dwarf-obsessed will be interested in what I’ve been able to discern, and perhaps will continue the study on their own.
"They want me to do what?"
You will remember from the story that the note the dwarves left for Bilbo on the mantle (in his own note-paper) touched on only a couple of points: namely the amount of Bilbo’s share of the plundered treasure, and traveling and funereal expenses:
“Thorin and Company to Burglar Bilbo greeting! For your hospitality our sincerest thanks, and for your offer of professional assistance our grateful acceptance. Terms: cash on delivery, up to and not exceeding one fourteenth of total profits (if any); all traveling expenses guaranteed in any event; funeral expenses to be defrayed by us or our representatives, if occasion arises and the matter is not otherwise arranged for.
“Thinking it unnecessary to disturb your esteemed repose, we have proceeded in advance to make requisite preparations, and shall await your respected person at the Green Dragon Inn, Bywater, at 11 a.m. sharp. Trusting that you will be punctual,
“We have the honour to remain
“Thorin & Co.”
(Source: Tolkien, J.R.R. The Hobbit. Boston: Houghton Mifflin, 2007.)
First off, one need only glance at the yard long document Bilbo is holding to know the movie dwarves are leaving nothing to chance. The length of the contract appears to be at least 10 times that of the book version (and almost every available inch is taken up with fine print!) Sadly, about half of this is out of view, or entirely illegible, but I’ve made some progress working out the tone of the contract, even if many of the lines can only be read in fragments. These dwarves are exceedingly specific in their “Conditions of Employment”, and I would say this time around, they will have Bilbo over a barrel if he tries anything with that Arkenstone (lame barrel-rider pun fully intended).
I’ve divided the contract into sections roughly based on paragraphs, labeled A thru L, which are upside-down in the image.
My attempt to sharpen the writing in Photoshop actually helped very little, and it was more a matter of zooming in and out, trying to find the magnification which gave the clearest view. Some letters are very distinctive, namely “d”, which always contains a sharp diagonal line, and “r” which tends to arch up and over the letter following it, and can be mistaken for an “i”, while in actuality, the dot of an “i” is almost never apparent. Knowing this, it was possible to guesstimate certain words, even if they were otherwise illegible. As a guide, I am including full-size pictures of each section with my estimates overlaid beneath the lines. Keep in mind that just because I’ve included a word does not mean I would stake my life on it being accurate (and in some cases, I would be surprised if it was!) My notes are in italics.
Part A and B, view #1
Part A and B, view #2