A demon (e.g. Cambion demon) has taken the shape of a respected member of the community (using polymorph self) and, masking his true alignment, shape and abilities, is slowly spreading death and terror in the city.
The PC's are hired (as special agents by ??) to find the perpetrator and capture/kill them before it gets even more out of control. The demon is able to change shape easily and hence occasionally changes to take the form of one of its victims to throw off the scent. Its sole purpose is to cause disruption and Chaos (or was it brought here by someone for other reasons and escaped or was turned loose ?).