There is a good setup, but the actual adventure is only a small fragment of this submission. It really is a wrapper for any number of setups.
This sounds like a good scenerio for a LARP!
I would not use this one lightly, unless the PCs had little real interest in the region, for the label of traitor is not one easily lifted.
Now this is an evil one. I would tend, as others have mentioned, to give more hints early on, but thats my own take.
A great plot!
A great start to an adventure, or a really good complication to an ongoing one...
A good basic plot and could, as manfred said, be a good campaign start location.
This strikes me as a good prologue, but some help on what to do next might be in the offing. A lot is left as an exercise for the student :)