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Niles hits Jazvit for great damage, which wipes the idiotic grin right off his face. Everyone else misses. Jazvit is in a great rage over Niles' impudence and charges him with his little sword for 3 damage.

This charge incurs an attack of opportunity from Enlali.

Top of the round.

Seeing the group's difficulty at hitting the gremlin, Harskgun shouts out a battle cry and calls upon the Father of Creation, "For Torag!"
(Standard action: Casting bless - +1 morale bonus to attack rolls and saves against fear (20 round duration))

"Oh no you don't!" Enlali yells, jabbing at the gremlin as he runs past.
(Attack of opportunity: 1d20+5= 20
Damage: 1d10+4= 12)

"Hey! I said, No. You. Don't!" She shuffles over and slashes down at the gremlin.
(Attack: 1d20+5= 20
Damage: 1d10+4= 8)

Enlali's first attack fails to penetrate Jazvit's stubbornly high defense, ("Oh yes I did! Ha ha ha!") but with an ally flanking the creature from the other side, she's juuuust able to do it. And now Jazvit is a pile of gibs. 200 XP.

What do you do now?

Loot: 4 Tiny short swords.

Niles pokes around the gremlin's corpse for anything the group can use to prove the creature is dead.

Gremlin ears come off real easy, especially given the condition of three of the bodies.

Niles carefully removes the ear of the gremlin chief, and then commences a search of the area for anything of interest (traps, loot, monsters in the darkness, etc).

(Perception: 1d20+8= 22 (23 vs. traps))

Reloading her musket, Manizei stands back as the others tend to ears and loot and other things, keeping an eye out for any other gremlins, who would likely be drawn by the sound of this brief fight.

Niles finds the gremlins' accumulated treasure under a rock, consisting of various coins, pieces of jewelry, and other spoils from their mischief in town, worth roughly 1,150 GP total.

Manizei gets the distinct impression that you just killed the chief, and she won't be seeing any more gremlins around here for quite some time as a result.

Niles' keen senses also detect a faint rumbling in the northwest corner of the cavern, and realizes he may have moved the wrong rock. You may want to stand back a ways.

(Added to party loot: 4 tiny short swords, 4 sets of gremlin ears, 1150 GP of coinage and jewelry)

Harskgun puts away his dagger and loads the accumulated loot into his pack...aside from the gremlin ears.

"Time to go tell the skulks the gremlins are dead?"

While the others were gathering loot and suck, Enlali was absently picking a rather impressive wax ball out of her ear. "Works for me!" she says, flicking the little ball away.

"Precisely." Niles agreed, wrapping the chieftain's ear in a piece of torn fabric he'd found.

As you're leaving to report back to Sef, the faint rumbling in the north of the cavern becomes a loud rumbling, and then a small cave-in occurs where you were standing a moment ago. It appears that Jazvit had attempted one last trap, and that it didn't work as well as he'd hoped. In fact, all it seems to have accomplished is creating a small opening in the wall roughly perpendicular to the metal wall. A quick look through this opening reveals that it opens onto the path leading up to the summit of Black Hill. It's small and unobtrusive enough from the outside that it should be easy to conceal from any Technic League audits, and will allow passage to and from Torch without having to go through Weeping Pond.

Sef takes the news of the gremlins' gruesome deaths very well indeed. "All right then. As promised, we'll allow you passage through our caves. And the stuff we promised you." She hands you a bag containing 49 silverdisks. "Also, these," she says, handing you five cards. These cards are made of some sort of smooth, flexible material and each has a large brown stripe on it. "I frankly have no idea what these are, but Meyanda wanted any we'd found before she went in. At the time, we didn't have any, but if she wanted them, they must be good for something. We found these just inside." She points at the circular metal door in the wall. "You can head on in when you're ready. Me, I'm staying out here, where it's more or less safe. I'm not tangling with any crazy machines or four-armed skeletons today."

(You have reached an accord with Sef, and nary a knife in anyone's back! 265 XP, as if you had defeated her in combat.)
(Know: engineering checks may be made to determine what these funny cards are.)

(Knowledge [Engineering]: 1d20+6 = 23 (I have the effects of the Technologist feat for Knowledge [Engineering]))

"Four armed...skeletons?" Harskgun ponders aloud.

(Harskgun determines that what you've got here are brown-level access cards (Technology Guide pg. 39), which will function as keys to the corresponding doors inside the ruin.)

"Yeah, there's some sort of weird indoor desert in there, and those skeletons haunt the place. I don't know what they're skeletons of, or where they came from, but I for one am staying way far away from them. Have fun in there."