Oblivion:Infiltration

Quick Walkthrough
# Talk to Modryn Oreyn in his house in Chorrol to receive this quest.
# Speak with Jeetum-Ze at the Blackwood Company Hall in Leyawiin to join their ranks.
# Drink the Hist Sap and kill the "goblins" that have "invaded" Water's Edge.
# Follow Modryn Oreyn's orders and speak with Marcel Amelion in Water's Edge to investigate the state of the town.
# Return to Modryn Oreyn to complete the quest.

Detailed Walkthrough
A Double Agent Is You
When Ajum-Kajin dies at Modryn Oreyn's house in Chorrol, Modryn tells you the next step is to infiltrate the Blackwood Company and its ranks so you can investigate the answer to the final question and discover the secret of their strength.

Jeetum-Ze
thumb|right|Jeetum-Ze giving the orders
Travel to the Blackwood Company Hall in Leyawiin and speak to Jeetum-Ze about joining the Blackwood Company. He will be suspicious at first as he has heard of your exploits with the Fighters Guild, but he shrugs it off, remembering that several guild members have defected to the company recently, such as Maglir. Follow him to the Training Room to get your first mission.  He will give you a special potion called Hist Sap and will begin to explain its origin. He explains that the Hist came from his homeland. However, when asked the question "You smuggle hist sap?", he reveals that the Blackwood Company has supposedly brought a hist tree into Cyrodiil. He will then instruct you to "drink up and get going", so drink the sap and you will receive a journal update saying that you feel a strange effect coming over you. After this, you will be transported to Water's Edge.

Goblin Trouble
Assist the other company members in killing all of the goblins around the settlement. One of the other Company members will then tell you to look in the houses.

You may notice that the "goblins" don't really behave like they should.  For example, they will not attack you.  If you start to suspect what is really going on, you don't have to "clean out" the houses.  If you go far enough from the settlement, you will be relocated to where Modryn is and may continue as described below (in the construction set this option is labeled "ran away like a punk").

Delusion and Death
After you have killed all of the "goblins" or have fled the scene, you will be transported to Modryn Oreyn's house. Speak to Modryn and he will tell you that his men found you unconscious in the streets of Leyawiin. Upon hearing your story he will be deeply concerned and will tell you to go back to Water's Edge to find out what really happened.

Return to Water's Edge, which is along the road north of Leyawiin.  You will find the town scattered with bodies, namely those of: Biene Amelion; Marie Alouette; Eduard Retiene and Jolie Retiene. It seems that under the influence of the Hist Sap, you and the other members took them for goblins and killed them. Find and speak to Marcel Amelion, the sole survivor.  He mourns the death of his daughter Biene, who was part of an earlier Fighters Guild quest, Amelion's Debt.

Quest Complete
Return to Modryn Oreyn's house in Chorrol and speak to him to complete the quest.  He assures you that the slaughter at Water's Edge was not your fault, and proceeds to explain the next step.

Notes
Even though the "goblins" are supposed to be humans, they can still be soul trapped with ordinary soul gems.
If you are playing as an Argonian, the Hist sap will still affect you, despite the fact that Argonians are supposedly immune to the sap's effects. This may be due to the fact that it is considered "bad Hist sap from a sick tree" and thus would have abnormal effects. Modryn will comment that he is "a bit surprised it affected you the way it did, given your heritage".  This bad sap theory is further supported by an Argonian being among the other members sent.
If you duplicate the sample of Hist Sap with the Skull of Corruption, the duplicate is flagged as a quest item and cannot be removed from your inventory. Consuming the copied sample teleports you to Water's Edge as a result of the item's script.
The company members are flagged as essential, so there is no option to kill them in place of the villagers.

Bugs
 
 
  
 
 
 Opening the command console, clicking on Jeetum-Ze and entering   while on the ground floor should move Jeetum-Ze out of the loop to your location. 
Casting a Demoralize spell on him, or engaging in combat and yielding may break him from the cycle.
Attacking and rendering Jeetum-Ze unconscious and then moving his body down the stairs will break him from the cycle.

Journal Entries