Great scenario!! Probably my favourite so far, I really enjoyed the moments when the agenda/act decks advance- great design

I have a couple of questions though:

Does the Abbess stay permanently at the the St Marco Basillica location - or do players take control of her?

Did I miss something? (Highly likely ) does Cnidathqua do anything? It's not engaged with you, it's not at any location, is it discarded when you get to act 3? ( I think not, as it is not in a location)

When innocent revellers are killed by taking damage, what happens to them? Are they discarded and therefore placed under the agenda deck? I used my innivpcent rvellers as damage soaks and advanced the act - I think this is correct!

Great fun scenario.

The Abbess remains at the Basilica. You may only take control of her as part of a scenario resolution.

Cnidathqua remains in play. He will attack only as part of specific encounter card effects; otherwise he's safe to ignore if you so choose.

Innocent Revelers that are killed are placed under the Agenda deck. Those that you take control of and return to the Basilica go under the Act deck. When all 3 Revelers have been placed under one or the other, the Act advances. Beware, though - it's not really a good idea to use them as meat shields. You're gonna want to save as many as possible!

used my innivpcent rvellers as damage soaks and advanced the act - I think this is correct!

It's correct in the sense that it's legal, yes. It'll really come back to bite you in the resolution, though.

So my son and I played Carnivale of Horrors and once we got to the boat and had to make the rowing checks to get away I thought Cnidathqua was supposed to attack us both each round. So it doesn't get normal attacks every round also?

No it doesn't get attacks since it is not engaged with anyone. While you are rowing the boat the tentacles that you put into play (if drawn) are proxies for Cnidathqua (as evidenced by the text on them that states Cnidathqua gets one damage when a tentancle is defeated).

So I just completed Carnevale of Horror after completing the first 2 Dunwitch scenarios.

I rescued all 3 Innocent Bystanders and got them under the Act deck and then proceeded to blast Cnidathqua (the big bad) to pieces and thus completed ->R2.

To even attempt Carnevale of Horrors cost me 3 XP. Because I never killed the Baleful Reveler or one of the monsters under the Masked Carnevale-Goers (in fact only flip one over as a result of completing Act 1) I accumulated zero Victory Points (didn't see any on the location cards.)

I sorta feel cheated. I mean I beat the big bad and I don't get any XP for my characters. I feel like this is a misprint. Why wouldn't their be Victory points on Cnidathqua?

There are no victory points on the Rougarou either.

It costs 3 XP because you're guaranteed to get a Mask for each participating Investigator. In your case, you also earned the Abbess for saving everyone.