Currently, this quest is extremely easy, with a potentially exquisite payload.
I'd suggest adding the human guard spawns in greater extent to the walls on the outside of the castle; this would make the quest somewhat more difficult, make the walls less of a rollover for anyone with a certain lvl 2 buff and perhaps cause it to be more balanced in payload-expenses.
I'd suggest that the DMs start randomly dropping Hellballs on LiS whenever there's an R in the month. That'll stop his elitism hey? :P
I would agree though that the actual walls are a bit too easy since everything is using a ranged weapon and never changes to melee. the bits below are where all the melee stuff is. I would suggest replacing a bunch of the Goblin Archers with Goblin Rogues instead as they will swap to knives up close. The lack of AoOs and the introduction of sneaks will slow the walls down some.