'When certain clans among the Dunlending people capture a territory, they place standards there to announce their victory. When our encampment was overrun, the Dievlig raised their standards there in honour of their victory.
'Will you seek out these standards, destroy them, and defeat any of the Dievlig's captain's that you encounter there? Go south and follow the trail to the hill-top where our camp once stood.'
The Dievlig have planted banners to illustrate the conquest of the encampment that once housed Bledhun and his allies.
The hill where Bledhun's party was once encamped lies to the south of Bledhun's current camp.
Bledhun asked you to seek out and destroy any standards that you find at his old encampment and defeat the captains that took the hill.
Bledhun is at his encampment, south of the hill where his party formerly encamped.
You should return to Bledhun and inform him that you were able to destroy the standards that littered the camp and defeated the captains that you encountered.