Slitherine

I have raided all the settlement, heroes alive, killed everything, played it through twice....but game will not advance...not sure what I have to do...been to everything on the islands...is this a bug??

There are lots of settlements over thee islands...easy to miss one.

best: click on the little symbol next to the task (top right of screen)
it will show the settlements one after the other.

There are 3 castles over the map w settlements around them and also a walled in area w 2 settlements, all together 10 of them, if i counted correctly in a savegame
you should also free the dragon and kill the slaver b4 you raid the last settlement...

I have done this several times, and had np finishing. Hope this helps.

It has to be a glitch in the game, I am now replaying the first scenario...and I cannot advance... very frustrated.

Did you play on easy? If so, switch to normal before the end of the scenario.
Do you have a virus scanner active? If so, please add FG2 to the exceptions or disable it while playing as it may mess with our game trying to create a savegame.