Some people who have run into problems with that cut scene found that if they left one character on the other side of town and approached the area south of the chieftain's house (where the imp hero is) with a single character, the cut scene would work properly. Clicking on the x to exit the conversation rather than continue talking to him may also work (though is sounds like you might have tried that).
BTW, you've probably seen this, but the latest
patch is 1.45.