The last of the goblin guards tries to surrender; Airick puts his blade to the goblin's throat and demands information about Gundren (without mentioning names). The goblin immediately tells us that the dwarf is in King Grul's quarters. When pressed for more information so we might spare his life, he warns us of a "vicious beast" in the tower just south of the furthest tower (furthest tower has Grul's quarters). He also warns us of some traps, all the while begging for his life. Airick decides to kill the goblin anyway.
Investigating the door to the south, we find more goblins, ready for combat. Likely, the alarm has been sounded, or at least the rest of the stronghold is probably aware that something is happening.