After defeating the Commander, go through the now opened archway and climb the stairs to the top. Follow the platform parallel to the stairs to find Loot Crystal #2 (this will have become active by killing the Commander). Follow the small path to the left of the Loot Crystal.
You should see a pair of enemies along this path in the distance – a Crossbowman at the base of the tower ahead and a new enemy – a Shieldman patrolling from the tower out along the wall and back again. Pick up the quest item Bloody Flint from the ground in the centre of the path and then take on the Shieldman when he returns.
Once you have the Bloody Flint , play through the area until you reach the Burned Watchtower. Fight off the enemies on the roof of this and then interact with the large pile of wood here to set it on fire. This will complete the side-quest and net you 1,000XP .
Watch out because doing this will cause a Rogue to spawn and attack you from behind.
Later in the game, when you enter Keystone Citadel, you can find a pair of guards talking about the signal fire. Interact with them for an additional 500XP .