I finally could not take Nazeem anymore so I put a frenzy poison dipped pick axe in him which resulted in his demise at the hands of Whiterun guards. At the same time, the guards came after me for my assault. I took refuge in the Companions' house, and many Companions came to my aid against the guards. In matter of seconds, a bunch of Stormcloak guards and lot of my pals in the Companions lay dead, including the old lady who swept up the place. I fled town and came back a bit later and was given the option to pay my bounty, which I did.

However, when I went to lay down to sleep in Breezehome I received the message "you cannot rest while guards are pursuing you." I thought, "What guards? I paid my bounty." In fact, all the guards in Whiterun were peaceful to me. I left town and tried fast traveling. Same message: "you cannot rest while guards are pursuing you."

Now, no matter where I go I keep getting this message. And no one seems to be pursuing me. I am not allowed to sleep nor fast travel. Has anyone heard of this? Did I break my game? Damn you, Nazeem!

Gawd damn, i hate Nazeem even more now... Try staying in one spot and waiting for a long time, if your on the Xbox, as soon as you press the button to start the waiting timer, press the xbox menu button at the same time, it will make the timer zoom by fast.

I assume it's just a minor bug, if you leave whiterun for a bit you should be able to wait/fast travel/sleep.

Edit: I think its the reason they make you thane of whiterun so early on, so you can use that thane power to avoid crime. To kill that [censored] nazeem.

Obviously the jarl is upset because of all the invaluable advice Nazeem provided. Oh but what am I saying, you never get to the cloud district, so you wouldn't know that.

hit the guards or leave the hold for awhle, should fix it