I am working on a homebrew campaign set in steampunk /industrial revolution alt earth but with magic etc for Steam punk stuff I am using pure steam and the second book westbound. PCs are starting at Level 2 and they are hired by Dwarven mining company to rescue some missing Miners who been kidnapped I am trying to figure out what type of monsters to use that would give them a challange but not kill them.
Kobolds with traps is a classic one, and steampunk could make traps look good. Or the ones with the traps could be a rival dwarven mining company.
What if the kobolds, goblins, and grey dwarves are all trying to steal the hostages from each other?
Kobolds should be played intelligently. Goblins dumbly, and grey dwarves like they are business types with a lot of money.
Kobolds plus giant spiders/centipedes/bombardier beetles?
Maybe look at Warhammer's skaven for steampunk ideas worthy of any kobold; steam-powered drill teams, gatling guns and pressurized flame-throwers.
Beyond that, maybe some small aberrations, elementals or constructs? The sorts of things left behind by ancient kingdoms of the long-ago, or signs that the company has dug too greedily and too deep?
Rust monsters, maybe? I can see them being regarded as an especial menace in a steampunk/industrial sort of society, so if they're deployed as guards, harriers, or hunting beasts, they'd probably be used as such by a faction or creature that's less technologically advanced (and technologically dependent) than the dwarves the PCs are working for. If you're looking for "challenging but not lethal," rust monsters can do that, since they're unlikely to prove lethal on their own but they do tend to force an adaptation in tactics and equipment, and they're made more dangerous by pairing them with creatures that can exploit the weaknesses they create.