I can't avoid getting Osmadi killed...I did accuse Carsone and discover he was a shadow druid. I've tried casting Friends with Xan, trying to beat him down with fists...no success yet. Can it be done, and is it any good if you can? Or is he just another shadow druid who won't like you? By the way, Carsone seems awfully evil for a neutral character.

There is nothing you can do in this scenario. The whole point for this was to get a bunch of XP for early Characters.