Clue:
Speak with Lady Servil and then head east until you find a house with a chest inide it. Open it up and then search it for armour. You will get a Khazard meduim helmet and a Khazard plate body.
Head to the nearby Southern entrance of the arena (make sure you have your Khazard armour equiped) and try and open the door. The guard will let you in. Talk to Jeremy through the bars and he will tell you that a guard has the keys. Go right to the very back of the building and speak with the guard. He will tell you that after a Khali Brew makes him sleepy.
Go to the pub at the head of the arena and bue a Khali Brew. Head back and then give the Guard the brew.
Use the keys the guard gave you on the door of Jeremies cell. You will then have to fight an ogre. For tips on defeating see
~Arena Tactics~.
After you have killed the Ogre you will be taken prisoner. Talk to the man in the cell with you and then a gurd will come. You will see yourself moving to the arena. General Khazard will introduce you to the crowd and then you will be pitted against a Khazard scorpion (lvl 44). AFter you have killed the Scorpion you will face a Bouncer (lvl 137). Once it is dead General Khazrad will attack you.
Once you have killed the General go to Lady Servil and claim your reward.
QUEST COMPLETE!
~Arena Tactics~
Ogre: This should be a fairly simple battle. Just run in and attack it and kill it. Theres not much more to it.
Khazard Scorpion: Again, this is a really simple fight. It shouldn't take more than a minute to defeat it.
Bouncer: This is where the Bow and arrows come in. If you notice there is a stucture in the centre of the arena. The Bouncer get caught on this and you can stand and fire at him. This works for mages as well.
General Khazard: To be honest this is the hardest enemy to kill in the quest. You can't use the same tactics as the Bouncer so I find good old fashioned hand-to-hand combat is best. Just attack him, heal, attack him, heal. Just repeat this until he is dead.