This looks to me like two seperate questions. One is how to keep Slasher and still complete the quest to give it. For me, it works to identify Slasher, put it in a chest, and then talk to Smiruk(orc who wants Slasher).
Other question is how to defeat the Orc above where Smiruk and his friends stand. For that tough Orc leader, you don't need to fight him immediately, you can easily finish the catacombs if you haven't and then roam the countryside to kill smaller Orcs. I personally find that tough Orc guy hard without either hit&run with Meteor Strike, or the Poison skill(poison skill needs level 8 to take though, AND a vial of poison per use, yeilds 10 charges of poison per use). You won't need to specifically use the ladder near Smiruk either, if you explore thoroughly the area near Aleroth, you'll eventually find that tough Orc leader guy.
Thanks for the tips on the Orc Leader. I will keep an eye out for him on my travels. <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
**Mild Spoiler**(I think)
So far, he is the toughest challenge that I have faced! There was an undead Conjurer Lord(or something like that) in the 5th level of the Catacombs that kept on smoking me. I had to grab Garrett(the fellow that you can get on level 2) to help me. Too bad he goes *poof* when you go to the surface. <img src="/ubbthreads/images/graemlins/winkwink.gif" alt="" />