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Speak with Corporal Sethman.
The note you gave me is signed with an "-M"...I don't know what that could mean.
But...the note also says this person shared patrol routes with Thorsen last week. So whoever shared patrol with Thorsen last week must be the traitor!
Go to Corporal Sethman. He handles the patrol schedules and can tell you who was with Thorsen.
Oh, yes I can check that for you. Let's see...last week it was...
...why, it was Private Merle scheduled with Thorsen. They had the same patrol times all of last week.
Upon completion of this quest you will gain:
At last, the traitor is about to be revealed. Lieutenant Doren has you talk to the Corporal in charge of scheduling patrols. Surely he will know who was on patrol with Private Thorsen, and provided the information to the Kurzen about the plot to infiltrate their ranks.
And the traitor is... Private Merle.
Shortly after you speak with Corporal Sethman, Merle will run up to you and shout a curse at you. Warning you of his revenge. An empty threat indeed. He will become a hostile to the other guards in the camp. One or more of them will attack Private Merle. You can participate in this attack to help kill the traitor. However, depending on how far Private Merle is from the camp he will run away before the guards can reach him. If you follow him the second you get to bridge leading to Duskwood (which is where he flees) you will see 4 lvl 27 undead running from Duskwood towards you...they first run towards Private Merle and kill him, then they attack you. Depending on your level and class at the time of your completion of the quest this can be a dangerous situation and it may be advisable to run back to the Rebel Camp and let the guards kill the undead.
Once the traitor has been dispatched speak to Lieutenant Doren. You do not need to kill the traitor in order to return to Lieutenant Doren, it's just nice to tie up all those loose ends.