Just above the tavern in the Saradush city, some elves are having trouble with the local authorities (seems familiar). Threaten the guard by telling him that you are a Bhaalspawn then talk to the elves, who believe the guards will make their move again soon. If only someone would offer them refuge... Head down to the Temple of Waukeen and talk to Farielle. She'll help the elves out. Return to the elves and tell them the good news: reputation +1, 3000 exp for all party members.