Once players clear out the Torture Chamber, it's all but a foregone conclusion that their next stop will be the Chieftain's Lair. This encounter should be the culmination of the goblin encounters in Keep on the Shadowfell but it oddly fails to pack the punch of the module's other boss-level fights.
The centre of this encounter is a goblin called Balgron the Fat. This chunky villain heads up the Keep's goblin contingent and can present a reasonable challenge for a first-level party. His presence (and the fact that he warrants a distinctive name) suggest to players that this is the conclusion of a small-scale quest line, and the drama is upped accordingly.
The players can reach the Chieftain's Lair in two ways; either by proceeding directly east from the Torture Chamber, or by using a secret door located on a corridor adjoining the Goblin Guard Room. They're unlikely to discover the secret door by their own investigations and will really only find it if they interrogate Splug at length.
Using the secret door takes the players right into Balgron's bedchamber and lets them kill him in his sleep. That's neither heroic nor climactic but it's the kind of thing that some players are in the game for. I'm not a fan of this kind of conflict resolution. The theory is that by brains and cunning the players have overcome what would otherwise be a significant obstacle, although really it's more like by avoiding heroic behaviour they've opted out of the inherent challenges of being a hero that define high fantasy as a genre and D&D as a game. Ultimately it's a matter of play style, though.
If the players come in through the front door they'll be facing what is theoretically a hard encounter. Two guards near the entrance sound an alarm, summoning the remaining goblins in the area. The party may be initially swamped if they've charged into the front room, but the profusion of choke points will soon let them re-establish control. Also, Balgron doesn't enter the battle - he instead waits to see how it goes, and then flees through the secret door when things turn against him.
Balgron's escape is frustrating from a encounter standpoint; it can leave the players feeling robbed. However, it's necessary from a dungeon design standpoint. The developers have unwisely tacked a series of dead-end caves onto the first level of the crypts (which we'll come to in due time) and it is to these caves that Balgron flees. Were Balgron not to enter the caves, there would be no reason to visit them, and three significant encounters and a sackful of loot would thereby be entirely missed. Probably the better option would be to delete the caves, have Balgron stand and fight, and shift the cave loot to his corpse, but for the purposes of this exercise we're seeing how the adventure runs as printed.
In the end, aided by terrain and an absentee villain, the players will end up making pretty short and unsatisfying work of Balgron's guards, so DMs who'd hoped to use this fight to cap off a play session will probably wind up feeling shortchanged.
 The whole purpose of the goblin series of encounters seems to be for the players to kill Balgron. However, there's really no reason to kill Balgron other than to loot his corpse. Added to the cave system, it makes a total of six encounters that can be completely bypassed without the players even noticing. Why are these encounters in the module? Or alternatively, why are they not placed down the main spine of the adventure?