OK, this involves the Elf-Orc Blood Feud quest. Initially got this quest early in my playthrough, went to Victoria and failed the Charm mini-game. Tried to pickpocket quest item from her but failed that too with a pickpocket skill of 2. After almost completing the game I decided to finish this quest. My other option was to have Eglandaer arrested, but I needed proof first. So off to the Inn.

My first attempt gave me this statement: "Unable to steal this item. Its value exceeds my limit." What? I thought about it for a while and decided to increase my pickpocketing skill. You need to be level 4. Really? OK, I try again and succeed. Gave object to Capt. Aureus. Immediately the infamous exclamation mark shows above Madoras' head and no one in my party can interact with NPC's.

As previously learned, left Cyseal via East gate, returned and all in party except Madora can now interact with NPC's. In addition, went to see Enlandaer arrested at the Inn and then went to jail to see him there. When I arrived, he and the Legionaire had the exact same conversation as they had at the Inn, and then both disappeared again. Also, if you go back to Capt. Aureus, you can have same conversation about proof and arrest again. Seriously?

I have a save before all this occurred. This time I'll try and pickpocket Victoria!