Yes, this bit is really misleading (even the walkthrough I've got erroneously tells you to sneak past). I spent ages (and about 15 reloads) trying out various combinations of invisibility spells and potions, Sanctuary spells, non-detection, etc, to no effect, until I found that you actually simply had to kill the two guards, as quickly as possible. They only have about 10 HP each, so it's not too hard if you know that you ARE supposed to kill them...
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