Both of the guards have a handle. If the guard that always lies pulls his handle, then the minecart will divert to the second track. If both guards pull their handle, the prisoners will be released. One of the handles is covered by a wooden box, where half of the wooden planks of the original box have been replaced by new ones cut from a tree that fell when nobody was around. If guard A is taller than guard B, are we getting paid for this quest?
Wrong. If one points a direction, they may have just been actually familiar with the layout of the castle.
Yes. That's exactly the point. If one of them points west, he is telling the truth. If one of them points any other directions then they're a liar. The only way this prompt doesn't work is if one of them knows and lies about knowing and the other actually doesn't know, which is a very hyper-specific circumstance.