Solution

The hermit is located west of the pub. first have to kill red goblin

in mines. go down hole and east till dwarf. kill him and go north, find

red goblin and kill him. he is VERY hard to kill if you do not have a mage

with you and not that easy with one. he runs. next go kill the yellow

goblins. This takes a while you need 20 scalps but you can turn them in

to the hermit as you go along. yellow goblins wimpy also. you need to

kill them, take corpse, scalp corpse,drop corpse.