It didn't work for me. I had the conversation, left and returned with the ale, and then the conversation option about mead doesn't come up anymore. I gave him the ale in trade for nothing and nothing happened. He just continues to give the rants about the elf as options.

What's supposed to happen here? He gets drunk and tells you something? I've been to Dwarven Halls previously regarding the necklace for Sir Dante's servant. Got it, returned it. But while there, I went down the mine entrance, killed every evil dwarf in the place and found nothing else, no entrance to Dol whatever (the demon place) - it was rather small dungeon actually.

Did I miss something. I'm stuck on that and getting Dwarf dude to the council. I've talked to everyone in the damn village and I'm just running in circles now.