Well, even though we only had 2 players, they recruited two adventurers to help out with clearing a section of the tunnels. What they found was telling indeed.
Groups of tainted goblins and dire rats were in the section of the sewers the party entered. In the midst of one battle, a goblin "transmogrified" into a bigger, tougher, entropy-infected goblin that carried plague.
The party prevailed but one was infected with the Dire Rat Filth Fever disease. The Eladrin cleric that was brought along went white when she recognized the entropy infection that hadn't been seen for 20 years. Personal effects of the goblins turned out to be that of missing persons (who had been disappearing for the past 3-4 months). A ring was found that linked one of the goblins to the missing servant.
The next day, Gellac and Squiggy found that the minotaur paladin of Pelor wasn't seen by anyone else but the party. Nobody remembered seeing him and the owner of the Traveling Troll said that Gellac was talking to himself at the time. They are now looking to interview dwarf twins who do the cleaning and maintenance of the inn.
A rat was caught and fed water from the blackened river (the river turned 3-4 months ago). The rat died in a painful and agonizing manner.
The missing persons that were found to have been turned into goblins were all human. Non-human guards were stationed at the locked sewer entrances by order of the city guard.