I have shared the save files with you as requested.
However I have tested a bit more and I actually think it is related to the other issue you mentioned.
If I "steal" from all the boxes in the room with the now dead dwarves (where you activate the Isbael event), but NOT try and lockpick the chest, which can't be lockpicked, all I get is a "hands off" message when teleporting back to the Arx Square.
However if I also make just one attempt at lockpicking the chest, which can't be lockpicked, then all paladins in Arx turn hostile.
Apparantly it is interacting with the items set to stealing in the room of the now dead dwarves, which sets this off, and the chest in particular which turns them hostile.
