Hmm as to the blind guy, not sure as I never got the quest from him. I had 2 Malachite gems on me and then just gave them to him during the first dialog I had with him. Never even knew he gave a specific quest for it. Can't say, all I know is I had like 5 minutes of dialog it seemed with him before he even mentioned being able to see if he had 2 of those gems for eyes.
As to the demon are two demons in there, one you fight after fixing the elevator lever and going down another level and then one you fight further on in the lava cave.
Did you fix the elevator with the lever found in a chest, you need that to get down another level.
