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Walk further to the left.  If you have the old saw, it shouldn't be a problem to progress.

I don't have the old saw, where is that?

Outside the fortress... not sure how you missed it.

(+1)

I guess I never moved close enough to it for the camera to focus on the area, and with the zoomed out view the only thing I noticed was the tree

It's one of the difficulties with the 3d approach to a game like this. The hotspot hint helps in some of these situations.