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Braig sums up the nature of the conflict in this quest very well.
"There are no innocents here, just the guilty and the dead."
Which leaves me in a bit of a conundrum. I want to do what's right, but what's right is definitely murky here. If I kill Madanach I avenge the deaths he's caused while imprisoned and prevent more from happening, plus I save many lives in Markarth by avoiding a prison riot.
On the other hand, the Silver-Bloods are just as guilty, and frankly have justice coming to them when the Forsworn escape, willing to throw me in jail to cover up their scheming, and the Forsworn have definitely been wronged, first attacked out of hand by the Stormcloaks when the Empire was willing to negotiate with them, and then butchered mercilessly and enslaved by the Nords.
What does someone trying to do the "Lawful Good" thing do in this case? Who do we support to get out of Cidhna Mine? I know the REAL LG thing to do would be to just serve your time quietly, get the Oblivion out of Markarth and let the Nords and Forsworn tear each other apart, but the game's not going to let you do that.