I'm placing this here in case people later have the same issue as me.
If you leave the cave you are supposed to put the small explosive in, and the dam is not destroyed, run through this checklist to try and find where things went awry.
1) Did you activate the explosive? You can tell whether or not it was activated if 'Get into cover' pops up on your screen(mine showed it on the top left) and your screen shakes/vibrates.
2) Did a quest update pop up? If the landslide killed all the goblins, a journal update will appear. If not, then you must go back in and kill some goblins. I only had to kill one.
Hopefully this clears up some issues. Perhaps the developers could make the explosion/rockslide script also trigger death of all goblins in that whole room, or they could add in a little text after the explosion stating that it is time to walk through the room and make sure all the goblins are dead.
So far: great game!