Actually that's the right thing then- if you only let the one guy get away-- go back to the guard who gave you the quest near the district entrance, let him know- then i recommend doing the trademeet quests-- druids and Djinni things.

For easy (but legitimate) XP, buy some scrolls and learn some spells. If you have some money, that is.

I have like 8k but I have been trying to take it easy on spending because of saving for Imoen. Should I even worry about that yet?

go trademeet its very easy

i made it first after circus