Good concept. Others have mentioned things that I'm not fond of, such as the small room. I like that the PCs have to save the villagers and that they are under some real pressure to do so.
I do not like the ad hoc experience reward. It seems like its rewarding something the PCs would do anyway.
The EL of 10 is showing as correct going by this EL calculator:
http://www.penpaperpixel.org/tools/d20encountercalculator.htm
... but given the effects that deaths have in this room, I'm not sure its appropriate. EL/CR is an art as well as a science. And this is a EL 10 that is harder than average for a "normal" EL 10. There are seven human bad guys here. This essentially means the PCs can only permit two townspeople to die. I did like how you set the townspeople's CON to 13, so even if they fail the poison save after death #3 they don't lose any hit points. That was good thinking.
Again: good concept. I'm not sure it would work in execution with a lot of groups though.