[tremorlaine]

That is the way we played it but the question stands do they get to look for a card if no card was discarded. The wording doesn't say, "If a card is discarded look through the discard pile."

The exact wording of the card we have is, "Immediately lose the item that gives you the biggest bonus...but if you win the combat (or if there is no monster), you may now go through the Treasure discards, starting at the top and skipping whatever you just lost, until you find an item you can legally use. It becomes yours. If the room is empty, you may loot is of Look For Trouble normally."

In our scenario the player had no item to discard and there was no monster to fight. She then looked through the discard pile and got a +4 to Psychics (which she was one) item. It was briefly discussed if a card such as Time Warp was the first card she came to since the wording did not say the first card with +bonus that can legally be used. However, I did find a ruling that said that it was referring to +bonus cards (it should then be added to the errata).