The water supply coming into Gondamon is still interrupted, despite your efforts to clear the canal.
'The goblins in these hills are causing us no end of grief. They've blocked off the river with debris and slowed the flow to a trickle, and what water exists is fouled by their presence.
'I can send a crew to remove the debris, but I need someone with a stout heart and a strong sword-arm to clear out some of the goblins. I can't afford to lose any workers, what with the Dourhands to contend with.
'You can find the canal west of here, just past the hills. The goblins have a camp west of their make-shift dam.'
The canal near Gondamon is to the west, past the hills.
Otkell, the Chief Builder of Gondamon, informed you that goblins are responsible for the lack of fresh water. He asked you to go to the area west of the canal and remove the goblin threat.
Otkell is at Gondamon to the east of the canal, beyond the hills.
You should return to Otkell and tell him about the goblins you defeated.