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It took some time, but Lady Yustiel finally developed an anti-toxin for it, called Yustiel's Tear. By this time, however, Kato and Garnis could not be found.[2]
In Source of the Pollution, you discover that Kato stayed in Verteron, where he had become horribly mutated, becoming the creature known as Poisonous Bubblegut. The contamination in his body made it into the ground water and is the source of the Contaminated Swamp.[3]
Isson, formerly a defender of Agairon Village who became an outcast, joined the Lepharists and has returned to Eltnen to wreck vengeance on his former home. He was been using Meslamtaeda's Blood to contaminate the Mystic Spring of Agairon until you put an end to his evil[4].
Finally, in Heiron, you find that Garnis is still alive, and is involved in terrible experiments at the Lepharist Research Center[5]. He must have finally found a cure for his condition, as he is human again when you encounter him. This means the Lepharists are in control of both the toxin and it's antidote.