The Lordship of Balin was short-lived. Ori, who was with him in Moria, recorded in the last pages of the Book how an army of Orcs came unexpectedly out of the east, slaying Balin outside the East-gate. The Dwarves defended themselves, but they were beleaguered from the east by the Orcs and from the west by the mysterious Watcher in the Water. Their last stand was in the Chamber of Mazarbul, where the Orcs eventually overcame and destroyed them.
The victorious Orcs seem not to have understood the significance of the Book, so that rather than carrying it off or destroying it; they left it to rot in the Chamber. There it was found twenty-four years later by the Company of the Ring, burned, slashed and blood-stained, and missing a number of pages, but still readable in some parts. Gandalf passed it to Gimli to return to King Dáin, after which nothing more is heard about it. If Gimli was able to keep it through the battles that followed, and didn't discard it with his gear at Parth Galen, it is possible that he carried it throughout his travels in Middle-earth, returning it at last to Dáin's heir Thorin III in Erebor.
Text of the Book
We drove out the orcs from the Great Gate and guardroom and took the First Hall. We slew many in the bright sun in the dale. Flói was killed by an arrow. He slew the great chieftain…Floi under grass near Mirrormere…came…ken we repaired…We have taken the Twenty-first Hall of North End to dwell in. There is good air…that can easily be watched…the shaft is clear…Balin has set up his seat in the Chamber of Mazarbul…gathered…gold…wonderful lay Durin’s Axe…silver helm. Balin has taken them for his own. Balin is now lord of Moria:…today we found truesilver…well-forged helm…n…coat made all of purest mithril…Óin to seek for the upper armories of the Third Deep…go westwards to s…to Hollin Gate.
r…(ye)ars since…ready sorrow…yesterday being the tenth of November Balin, lord of Moria, fell in Dimrill Dale. He went alone to look in Mirrormere. An orc shot him from behind a stone. We slew the orc, but many more ca(me)…(u)p from east up the Silverlode…we rescued Balin’s body…re a sharp battle…we have barred the gates but doubt if…can hold them long. If there is…no escape it will be a horrible fate to suffer, but I shall hold.
We cannot get out. We cannot get out. They have taken the bridge and Second Hall. Frár and Lóni and Náli fell there bravely while the rest retr…Mazarbul. We still ho…g...but hope u…n…Óin’s party went five days ago but today only four returned. The pool is up to the wall at West-gate. The Watcher in the Water took Óin--we cannot get out. The end comes soon. We hear drums, drums in the deep. They are coming.”