I don't even try to pretend the lizardmen are enemies. I use Oceanus from the Sea Ghost and a "meeting" with the town council to basically conclude right off the bat, the lizardmen are "likely" not the enemy.

That opens up the adventure to a diplomatic mission right away (there is no way to get word to them) and the goal to gain the lizardfolk's trust (instead of the smugglers/what happens on the Sea Ghost) and determine who the true threat to the region is. You can then run the adventure as a wilderness adventure through the Hool Marshes and then do a number of "tests" to gain the lizardfolk's trust, including killing the giant crocodile and maybe something else you can add (Bullybug fight was always hard in the original).

As a DM, I ALWAYS have one lizardman die (the leader/one with the Pseuodragon, which is cool treasure) and one jump over the side of the boat and escape (thus the lizardmen KNOW their weapons and arms were confiscated by the town/someone).