I've never had a problem running this quest before, but now it seems to be bugged, which sucks because it is a storyline quest which must be completed to proceed.
In the final battle against the waves of Sahuagin, it is almost impossible to keep Heyton alive. The problem is that even after the beasts are dispatched, him and Amalgam keep fighting, and worse, it appears that Amalgam's huge axe actually damages Lars and eventually kills him.
If you are not a healing class (I am currently a rogue), the only two solutions I can see are to bring along a cleric hireling, or (what I did) play it on casual and hope to get lucky. It has taken me two tries each on two different alts I have played over the last two days, so it is a quite reproducible bug. Might be a little disheartening for a new player who has no experience with this quest, so I hope it gets fixed soon.