From what I can see, I killed all the Khans. But my quest log still says to clear them out, I released the hostages and they're sitting outside. Is this a glitch or am I missing something?

I recall there being 2 Khans left inside of a building to the east of where the hostages were.

I looked there but I couldn't find any thing.

It's not outside, you have to enter the building through the front door and talk to the guy in there, like you'll load a new area. IIRC, there's a bus stop bench type deal out in front of the right door.