2) Side with the Shadow Druids and help them seal off the Grove after evacuating the Tieflings. - This outcome results in the least amount of death overall. You can tell Minthara and the other leaders about this, though you may have to pass several checks to hide your involvement in the ritual and the fact that you hid the Tieflings. Failing the checks results in the Goblin camp turning hostile. Minthara and the Goblins report back to Moonrise, and they execute all of their prisoners including Halsin on their way out. No party happens. Minthara's events at Moonrise are slightly altered, you have no option to back up Minthara since the raid on the Grove never happened in this instance, and her captors immediately go into trying to brainwash her further, at which point you can rescue her. - You can also just wipe out the camp anyway, and you would still be able to save Halsin at this point. The Tiefling party happens afterwards. - If the Goblin leaders aren't killed or you don't report back to Minthara and the others while passing all the checks, the Tieflings end up being killed on the road.
This seems like the best option, it's less death like they want and less added dialogue for the Devs and if you don't play your cards right you still can lose 3 Companions.
and your first option is ok but a lot of added content.