This one suddenly woke up on an island called Khenarthi's Roost after having spent an undefined time in a cold and dark daedric realm. Naturally, he felt the need to stretch his legs and so went for a walk. Khajiit thought he should try to use magic just to see if he could still do it, so he stopped walking after a while and focused his energy on summoning a scamp - lo and behold a scamp materialized infront of his eyes. Khajiit still knew magic. Khajiit also felt a need to stretch his arms and claws and so took a leisurely swing into the air in front of him - just to feel his claws slash through the warm, soft air. Instead he felt his claws get stuck in flesh.
Khajiit must have been dizzy, because little did he know that his claws had grown at a tremendous rate in the daedric realm and he had accidentally hit an elf surely four meters away. How his claws had grown so long in such a short time he did not know.
Maybe time passes differently in the daedric realms than on Nirn, yes? This one is uncertain.

The elf started attacking dizzy Khajiit, who tried desperately to explain to the elf that it was an accident. The elf did not listen. Elves never listen. The scamp responded aggressively and jumped at the elf, tearing at his pants and set the elf's robes on fire.
Out of nowhere came another elf with a sword and shield and without a word she started to hit poor Khajiit, all the while muttering something about Khajiit being a criminal. Elves never listen. Khajiit always criminals, the elves say. Given, it was my scamp that set the other elf's robes on fire.
Khajiit felt cold steel in his spine and he.. died. It was a curious sensation indeed, for he was not used to dying. And an even more curious sensation washed over Khajiit as he awoke again, in the same place that he died.

After awakening this one saw, in an impressive black armor, another Khajiit - this one thought that surely he would get help from a fellow Khajiit. But the impressive looking Khajiit simply looked ahead as the elf ran up to this one and asked for gold. This one tried to explain that it was an accident and that he had not even a single coin of gold on his body. The elf snorted, sighed slightly and then drew her blade once again.
And again this one died. Again Khajiit came back to life.

Khajiit does not know what has happened in Tamriel during his time in the daedric realm, but he was under the impression that the elves and Khajiit were allies. Khajiit was wrong.
The elves hate Khajiit.
And now, Khajiit spends his time hiding in the shadows, unwillingly an enemy of the Aldmeri Dominion.