Affairs of a Wizard
Oblivion: Dark Brotherhood Quest
The dead drop on Hero Hill will direct you to Leafrot Cave, which becomes marked on your map. Inside, you'll need to find a mage who is in the process of transforming himself into a powerful Lich.
Once you enter the cave, you'll find a handful of undead inside. Take them out and poke around the bedroll area. You'll find a book on a table – Celedaen's journal. The journal tells you of the newly-formed Lich's only weakness: a soul container which transports his soul during the transformation.
There's a book in the mage's living area called The Art of War Magic. Read it to get a boost in Destruction skill. The book should be on one of the shelves in this area, make sure you glance it over.
There are two options for defeating Celedaen. If you sneak up and pickpocket him, you can remove the soul container (called Sands of Resolve) from his inventory. As soon as you do, he'll keel over and die right there. Otherwise, you can fight him. If you choose to fight, though, come prepared as he is reasonably powerful.
Once you've killed him, you'll be directed to the next dead drop in Chorrol where you'll receive a 500 gold reward, and begin your next quest: Next of Kin.