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It took me about 5 tries but I was finally able to kill all four of the "midgets" in the Marching Mountains before any escaped. I reviewed my text screen to make sure there were only four: Chinchilla, Took the Brave, Merlinious, and Tibbit. I had to kill Chinchilla twice because he reforms as a Greater Werewolf. Does anyone know what the inside joke is with these guys? There seems to me a lot of humorous references in the game (discussed on various other threads) but I wasn't able to find anything about these guys. Thanks!

Its probably just for comic relief to us gamers because the start of ToB is pretty heavy.
Or possibly, it is an inside joke known only to the programmers, and put in as a massive laugh as all we gamers try to figure it out.
Not to mention, they have some decent gear to sell.

I'm not sure if there's a joke involved in it at all, but a Chinchilla is a rodent found in Chile and looks something like a fat squirrel.
Maybe it's the programmers way of says "Bhaal got around a bit too much".

i was just...cruising around, hoping to get a bit more xp from random encounters before facing Mellisan, when i ran into these guys and was like 'WTF? A Bhaalspawn RABBIT? Unclean Mental Images!'

None of them transformed into werewolves, though.