You can use magic (ie Lockpick) in the cellar of the building in the north west part of the castle complex. You can also toss everything out the front gate (I stored all my loot in a chest first).
There is a +10 reputation boost when entering the castle, so the net result is 'only' -5.
After you get the quest from Janus to pick some flowers, you can (save first) talk to him 4 or 5 times until he turns hostile, then attack him. This will break the main plot, so you must re-load a previous save, and even if you get him down to zero hit points he will not die.
