In the prison area go to the cell on the opposite site of the cell were you started the game, you have to kill a rat there and take the bone he leaves behind (deathknight gives a comment when you have the right rat), go with that bone to Edmund and show it to him, he then realises he`s dead. Be sure to learn first from him ( if you want), cause he will disappear right after the dialog with the bone. And you can`t go back when you`re in the pit but i believe later on in the game you come back there, i am not so far in the game right now so i don`t know that for sure.
