(edited by jsib.8256)
I was having the same problem as everyone else. I went to this thread and tried all the suggestions, but to no avail.
After trying the same strategy for three tries, I decided to try something else, since the definition of insanity is doing the same thing repeatedly and expecting the same result.
So when getting to the objective of <Defending the Lumber Mill>, instead of going all out and owning the mobs, I took a couple out and then ran back to the front gate, expecting the NPC’s to take the remainder out. After waiting for a couple minutes and still seeing the objective still active, I went back to the lumber mill and noticed there were about 5-7 zombies battling a couple of NPC’s that were still alive.
I proceeded to take out the remaining mobs at the lumber mill and kited a couple towards the main road heading to the Front Gate, and finished them off on the road. I got the message to <Defend the Front Gate> and headed down the road to defend the Front Gate.
When arriving to the Front Gate, there were way more zombies than the first three bugged tries, so immediately I knew that the questline would progress as normal, which it did and I completed the quest.
I believe the trick is when finishing the lumber mill objective, to kite the mobs towards the main road and then kill them, which somehow gives the zombies in the next phase a clear line of sight to the Front Gate so they can spawn correctly. I hope this helps since it worked for me.
(edited by jsib.8256)
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