I spotted one typo: "There was no room to use3 a sword" should not presumably have that 3 embedded in it.

There's a strange narrative jump when the elves turn up. It seems on first glance as if they actually ride into the jail on horse-back. Maybe you could make it more clear when the dwarves move outside because I had to read it several times and I'm still not sure if I'm following that bit.

I agree that it's good to see a story where elves and dwarves cooperate on good terms. I'm not quite sure about the "ritual cannibalism" reference, but it looks to be about something related to kuru, although the symptoms of that more usually involve shaking and trembling rather than frothing. An interesting bit of background information nonetheless.

Do you happen to have a map of Thobatol? I'd find that helpful in following the action.

I like how you mix both fantasy and horror with the dwarves, elves and zombies. Really interesting idea and it works very well. I can't wait to read more!