An initiate from Brotherhood of Steel has gotten himself captured in the Hub by Decker, and imprisoned in Old Town. He's being guarded in a building directly to the right of where the Vault Dweller enters Old Town, by several rough guards who carry the equivalent of a platoon's worth of firepower. They will shoot on sight and can easily take out a low-level character with minimal effort.
There are a total of four guards inside, one of which carries a combat shotgun. The guards can either be attacked through the front door of the house or shot at through a window on the northern wall of the building.
The Initiate is held behind a locked door in the rear of the building, protecting him from friendly fire. After the initiate is spoken to, return to Lost Hills and speak with Talus to be rewarded.
Upon entering the ambush house, sometimes one of the thugs will say "Have you ever danced with the devil in the pale moonlight?". This is a quote by the Jack Nicholson portrayed Joker in the 1989 movie Batman.