The druid has taken the form of a bear and is imprisoned in the basement of the Ruined Shrine in the Goblin Camp. Find Gut's throne. Go from it to the northeast, past the three goblins standing at the door. It leads to the worg pens where the cages are.
Khalsin is hidden in one of them. He will take the form of a bear, so do not be afraid. How to free him is up to you. You can kill the goblins or convince them to let the bear go. And if you kill three leaders, Khalsin will not be in the basement. Instead, he will independently get to the Druid Grove (and in the basement there will be torn bodies of goblins and a broken grate).
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