I'm also seeing a bug in this quest. The drudanae part of the quest always says I still need the drudanae, even though I have it. This is possibly because I had the drudanae before getting the quest. I can, however, still talk to jedediah and 'finish' the quest.
The quest advances, and the cutscenes start where jedediah is speaking gibberish. But, somewhere, the spell goes all wrong, and I end up with a Microsoft VC++ dialog box telling me that the application requested to exit in an invalid way, something about a pure virtual function call (I told you the spell went wrong).
I then came to the forums, and read that leaving the zone might help, so I did that. I flew into Broken Valley, killed a few towers, and returned. I tried it again, and the jedediah got a couple lines further with the spell, and then it crashed the same way it did the first time.
I got the game through Steam (the Dragon Knight Saga Pack), and am running XP.
Let me know if there's something else I should do. I do have a savegame, if you want it.