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At the very least, it sounds like you have killed Kala without realizing it. Her people block the way to the area with the documents needed to free Iago. I don't think there's any way past them without killing them, and I don't think that there's another path around them either.
Oleg (the "old guy") is in a building the eastern part of the city. His people go hostile if you enter the restricted area of his compound. You can enter the restricted area through the sewers, and I would assume that means you could initiate combat with him and his followers without talking to him.
I was just so confused because if you don't actually pay attention to the name when you hover over an enemy, with the graphics being what they are, it can be very hard to tell if someone is more than a normal enemy. I do recall a few reavers who had different sprites and made me think "this one must be extra strong" but somehow at no point did I think to myself "maybe that's one of the bosses"...again because I think I just expected to be able to talk to them all like the butcher and didn't think they'd all become hostile to me. Lesson learned!
If you explore the sewers FIRST, you can end up bypassing the "expected" route of talking to the 3 reaver leaders from stumbling across their secrets too soon. IE, if you find the area underneath Oleg's camp, and then try to ENTER his camp by coming up from the sewer entrance, it will turn his men hostile. I don't know if this also turns all the other reavers hostile, however.
Presumably if you start a fight when you first come into town, they also may all turn hostile.
On the other hand, if you approach Oleg or Kala from within the town, they're "friendly". As long as you don't act aggressively. I believe I had to find my way to the Butcher in order to initiate the chain of events that led to the less violent approach. But this requires going into the sewer, I think, due to blocked roads in the town. Just be careful... explore but don't start any fights -yet-. There are additional "town residents" you will run into as well.
Note that there is also a FOURTH group of reavers that are unaffiliated, to the Southwest - and some of them you can't reach yet. I think they're always hostile though.
I think this is exactly what happened to me because that's what I'd done. I had talked to the Butcher beforehand (he's the first one I bumped into but I forget how I got there, just that I know it was before the sewer...there's a path above ground somehow), but then I went to the sewer because I thought that was the only way to get past the barricades, and I ended up finding Oleg's men right away. I didn't even register that I was fighting him or his men, or then later Kala and her men, at all. Everyone just attacked me on sight so I killed them without thinking too much about it right up until I got the Chapter 3 title card and was like, wait, what?! It's over?!
After I beat the game I went back to an older save where I was able to do the entire Horryn quest again from the start and I did it the strategic way this time, trying to avoid getting into too many fights that might turn anyone hostile. Funnily enough I did still get to the sewers and fail the diplomacy check there and have to fight Oleg's men...but it didn't turn Oleg hostile once I went to visit him, so it might have had something to do with just getting into too many fights with other groups along the way as well, and just fighting the guys in front of the sewer alone isn't enough to turn them hostile. I made sure to quicksave a lot when I did it this second time, always checking my faction status before doing so, and by just doing that one fight I managed to avoid turning anyone hostile. So if you can't get into the sewers without fighting them, you SHOULD be okay as long as you avoid fighting too many other reavers.