He should be in the house in the upper, left corner of the map (NW corner). You sure that you're in the correct house. You should see him immediately upon entering. If you have done the quest correctly (i.e. The Duergar asked you to whack him) then he should be there. Were you there at night or in the daytime. He may only be there at night, but I'm not sure about that...
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Now where did I leave that doughnut?!