Interesting. That goblin boss *does*, in fact, have a powerful bomb that does 3d4+9 force damage. Quite capable of killing goblins caught in its radius, and IIRC - at the high end - capable of reducing him to surrender. But it would be unusual, I think, for him to use it in a way that catches his friends and himself in the blast radius. But that would be my guess - the dialogue closed, everyone rolled initiative, and then his turn came before any of your characters and he...blew himself up.
