Hmmm...two PC deaths eh? That's a heavy loss for the start of an adventure. Also, I'm curious why you went with a Goblin PC (especially in a city like Magnimar which might not tolerate monstrous races like goblins).
The goblin can be a renegade of the Mudchewers, tho how they deal with the city afterwards might be an issue. Though they've got a friendly Aristocrat NPC after so shouldn't be too much of an issue.