Entering the Bloated Man's Grotto from the North-facing opening of the cave, you'll find yourself in a small area with an open ceiling- and flooded in crimson light. This is the Bloodmoon, a sign that Hircine's power and attention are focused here. You'll quickly run across a small camp with two dead women and a mortally wounded Khajit man- three of the hunters that were looking for Sindig. The Khajit, J'Kier, will explain (in short breaths and shorter sentences) that 'the prey' is too strong- stronger than the hunters. He then expires and keels over.
Go ahead and loot the three if you like, though their gear is hardly remarkable. There is a fourth dead hunter as well, but it is a bit hard to find everyone with the chaos Sindig appears to have made of the hunters' camp. Once you're done here, you may note that the left-hand path is blocked- head to the right instead, and you'll quickly come to a second clearing, where Sindig waits on a rock outcrop overhead.
Recognizing you, the lycanthrope asks what you are doing here- thus prompting a decision from you.
You can choose to attack Sindig, either before or after talking with him. If you do this, then you will be bound to attacking and slaying the lycanthrope, who will lope away further into the grotto. This will force you to fight him the rest of the way through the grotto- not a good choice for anyone but the most heavily armored, as lycanthropes are very powerful in their beast forms and Sindig is no exception. His melee prowess is fairly incredible.
Alternatively, you can choose to ally yourself with Sindig. This will result in your having to fight off the rest of the hunters alongside him- not a poor prospect, considering they are all equipped to various levels and thus loaded with salable or usable gear. This also leaves you with Sindig following you through the rest of the grotto, essentially tanking the fights for you by leaping in to face the hunters in melee and taking the majority of their attacks.
If you're feeling truly sneaky, wretched, cunning, or cautious, you can hedge your bets: agree to help Sindig and then attack him during the last fight with hunters and you can take advantage of his wounded state to slay him much more easily than you could alone while still benefitting from the gear of the soon-to-be-deceased hunters.
