IIRC I think there should be a cutscene started as you approach (just the camera zooming... maybe a brief dialog), with the seekers and troll fighting.
If an earlier save doesn't help (or you don't have any recent ones), try loading the save in the Developer Mode version (for the Developer's Cut release) and use the 'reload scrips' command. Don't continue playing from there if that doesn't help (reload or exit to switch back to the normal mode).
If you email your save (or a Dropbox or Google drive link, etc) to support@larian.com, I can take a look at it.
With the PC version, in XP the saves are in the folder
C:\Documents and Settings\<UserName>\Local Settings\Application Data\Divinity 2\Savegames
or in Vista, Win 7/8/10
C:\Users\<UserName>\AppData\Local\Divinity 2\Savegames
You may need to set Windows Explorer to show hidden files and folders (see
here).
The dialog about not ratting them out is normal; if the fight proceeds as intended, being fast enough to speak to Merrill (before he is killed) is a way to open the hatch by the church, otherwise only opened if you get Louis to go easy on them.