I finished off all five black ring members; four defintiely died. I also defeated Josie but she made some comment about there being something more in store for me and disappeared. She was the last of the five but I never found her again. Did you have to chase her down after you located her?
I may have caused a bug by getting to the Demon before I killed everyone, though. I used a flash spell to do a teleport attack across the spikes and then found the Demon before I killed all the others. I went back and finished them off, then went back to the Demon, but he still didn't respond.
