First you talk to the leader in the construction site and you need bluff or intimidate to convince him you are a worker. Then ask him about any side jobs and you can bluff him and he will say that Rannos and Gremag of the Hommlet Trading Company are trying to sabotage the construction of the castle. Then go back to Burne.
My smooth talker halfling did not have this option, but a stupid dwarf warrior pretended dumb (-Uh..., -Errr etc.) and the agent revealed himself. I said "Aha!" and stuff.
I couldn't solve the quest immediately upon meeting Jayfie for the first time either. Later on, just north of the castle foundations there is a camp, I spoke to the cook and he mentioned that people are back in the camp after a certain time. Went back a couple of level-ups later with a better intimidate skill, and Jayfie was at the camp and could be intimidated into confessing.