With the two Goblin sentries eliminated, the group were free to enter the cavern at their own pace. Once again Siero volunteered to scout ahead, and discovered a small pack of wolves not far from the cavern entrance. Sneaking away to return with the party in force, the wolves (who were chained to the floor) were quickly dispatched.
A quick check of the room the pack was in revealed a small, narrow and steep passageway leading somewhere unknown. As Malik and Anders debated whether or not it would be wise to venture up the passageway, Siero once again scouted ahead. Unbeknownst to him he was spotted by a Goblin sentry, who went to alert his comrades, while Gwawr and Li joined him. Suddenly a rush of water appeared, overfilling the stream bed and washing away all three (while Malik and Anders remained safe and dry).
Upon recovering and drying themselves out somewhat, the party moved back up the cavern in force. This time the party spotted the Goblin sentry on a bridge high above the river and engaged him – but not before the Goblin screamed a warning to his friends. A second rush of water quickly followed the warning, but the group was ready this time and now one was swept away. Two more goblins joined the goblin sentry on the bridge and the party traded ranged attacks for awhile until eventually Gwawr climbed up onto the bridge and decapitated his foes with his mighty axe. Meanwhile Siero, unable to get in close quarters with the goblins, took a steep passage up from the river bed and found a den of goblins who were unaware of the battle going on in their cave.
The group decided to move on the goblin den next, but they were largely uninterested into walking into an ambush again. Instead, they elected to hold up outside the den, and try and goad the goblins inside into coming out. The goblins inside were led by Yeemik, who had Sildar Hallwinter as his prisoner. The two groups managed to avoid killing one another long enough to strike a deal – the party would kill the current leader of the goblins – a bugbear named Klarg (which would make Yeemik "king" of the group) and Yeemik would free Sildar. When asked about the whereabouts of Gundren Yeemik replied that he didn't know – that he was taken by the bugbear allies of Klarg somewhere.
Klarg, warned by some of his more loyal minions, was waiting for the party when they arrived, although they did manage to take down his pet wolf while sneaking. Angered by this Klarg charged the party responsible – Siero – and struck him down with a mighty swing of his mace but between the inability of his goblin archers to hit the broadside of a barn and the deft blows of Gwawr's axe Klarg eventually fell.
The party returned to Yeemik with Klarg's head and although Yeemik tried to reneg on his deal (claiming he still had the leverage, now that Klarg was dead) the threat of Li using her dread necromantic powers to raise Klarg was enough to make Yeemik relent. With that the party quickly retreated from the cave and once again resumed their journey to Phandalin, now with the weary and dazed Sildar Hallwinter in tow.