After multiple re-loads I figured out how to keep Rugan and his assistant alive, while still eliminating the Gnolls. I made sure not to touch the chest, which I figured might piss him off. Later on, I (and this may have been a mistake) killed all the Fists at the burning inn, prior to approaching the hideout with the password. The Zhentarim were friendly, and let me see the "good stuff" sold by their trader. So it worked for me.
I wonder if (1) did you mess with the chest, or (2) did you interact in a friendly fashion with the Fists (who apparently are disliked by the Zhentarim)?
