This happened to me, too. I think there were some Rattkin or Rapax in the monastery, but I skillfully avoided killing them by running in and out (to get the treasures). But right before entering the Rattkin tree, I killed 5 Ratkin Blackwhiskers. Not sure they are Rattkin Mafia, but seems likely.
There is a rumor around that if you wait a while (and have good communications, and didn't kill too many) your rep will get better. don't know if that means Barlone will suddenly be green after a while, but instead of waiting I just killed him.
Too bad, I was wondering if I could buy any good stuff from him.
This is with Deathstalker 1.6.
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