Deadwood was the site of an Early Third Age conflict between elves and trolls. After the Dragonkill War killed all the humans, the elves tried to reclaim the Pass from 1120 to 1150. Reinforced by Brown Elves from the Old Woods, the Stinking Forest expands to the Indigo Mountains (as well as down the Dragonspine).
The Elves planted a marching forest to try to break the back of the trolls. That’s why the trees go so far up the mountains. To the elves’ horror, the trolls summoned Gorakiki Beetle and swarms of bark-boring beetles killed trees and elves alike. The trolls awakened the Indigo Mountains and an eruption killed the trees inside the Indigo Mountains, and then the trolls released the beetles on the rest. The trolls were also aided by spirits and by the half-trolls of the Ivory Plinth.
This broke the back of the Aldryami attempt to reclaim Dragon Pass. The trolls keep the dead trees standing as a reminder to the elves what will happen if they try again. The angry ghosts of the Aldryami still haunt Deadwood.
Now this nicely illustrates the conflict between the Elder Races. Always remember that the Elder Races usually view all humans as the Lesser Enemy. The True Enemy is the other Elder Races. And they have very good reasons for this.