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.
