You can kill the guards for the experience points with no loss of reputation or negative consequences, or wait until after you run into one of the three mages later, after which the spell will be broken. You can not help the soldiers other than waiting it out, and that area is not involved in any quests.
Did you refuse to get George the Drudanae herb at the start of the game? That will break the murder quest, even if you later bring him his fix. Is Mardaneus still in Aleroth? Some people have had problems reporting on this quest after he moves later in the game.
