After agreeing to help the brother escape, you can choose an option to talk the guards into releasing him peacefully. How does one go about doing this? When I approach the fort, both the back and front entrances are guarded and I can't convince them to let me in. Is there a peaceful solution to this quest or do I have to go on a guard murdering spree to spring the guy from jail?

I'm not sure if it's actually possible. The strategy guide I have mention that even if you sneak past everyone once you save the guy he aggros everyone.

As far as I know there is no peaceful solution, just using that option keeps the brother from going with you.

Yeah I've been putting this quest off in the hopes that if my speechcraft is high enough I can intimidate or persuade the guards.

You have a dialogue option with General Tullius if you side with the Imperials. Currently, he says he can't do anything (I've only completed the first stage of Imperial quests) - perhaps if you were to continue this quest line, that dialogue option may open up. The other Imperial Altmers I know of are in the town in the rocks (Markath?) maybe they could do something - I haven't really tried

Most people are claiming that you need to be wearing a set of Imperial Legion armor, and not just the default Imperial set, in order to be able to order his release. Of course, I've been able to find absolutely no mention of such an armor set existing in the game, and I went through the trouble of completing the entire Imperial Legion questline. Either something is bugged or they just never intended a peaceful resolution in the first place.