Thanks to Spiznarky for these informations, and Reinhartmenken for an update:

Found: The Cemetary in Granemor. After three battles you meet Sir Halenro, a paladin who gives you access to this quest.

As you travel to the cemetary, you hear something...

Krabdal: IIIEEEEEEEEE!!!
Krabdal: Please help me! I am the renowned merchant Krabdar Percy if you did not know. I was minding my own business on my way to town and was most unkindly assaulted by a--
Noise from offscreen: RAAWWR!
Krabdal: AAAAHHH!
Krabdal: Please help! (Okay/No thanks)

If you choose "No thanks":
Krabdal: AAAAHHH!

Krabdal is dragged away by something offscreen.

Krabdal: EEEEEEEK!

You are returned to Yulgar's Inn. Maybe it's just me, but Halenro seems a little less friendly after this.

If you choose "Okay":
Demon Cat

Krabdal: Th-th-thank you very much Adventurer. I'm outta here...
Krabdal runs off and you continue your journey.

You soon reach Battleon cemetary...

You: Yes, the Paladin was right. Many graves have been disturbed. The Undead Army is surely replenishing its forces.
You: The stench of death is thick. Evil is near...

(You are hit with a leg bone for 3-9 Ranged Darkness damage, with a 15% BTH)

You: Aw, now come on!!

Undead Soldier

You: The Undead aren't tough at all! Bring it on!

Undead Archer

You: Want some more???

Undead Archer

You: These places used to give me nightmares. Not any more. So ridding the world of the vile undead is what Paladins do? I think I might enjoy this...

You are returned to Granemor

Source

Jergal, http://forums2.battleon.com/f/tm.asp?m=703100