Am I the only one that simply ran down the side bit with the chest and cast rain from there? I thought that's what you were meant to do to complete that tast.
No, that's the action I've been having to resort to with the last few patches just to get this quest done.
See, the way it used to work was like so: if you went over to that location (where the chest is tucked away) you would see the ship on fire. And that made sense, because the guards from the previous orc battle inform you about a burning ship in the harbor. So far, nothing here has changed.
When you entered the city gates one of the NPCs would run up to the others and shout
"Fire, fire!", the music would change, and all the NPCs in the dock area would run over to the docks and start throwing buckets of water on the ship. From the docks you could put out the fire on the ship using a rain spell.
The problem now is that last paragraph - that whole scripted part with the NPCs is triggering so early that players can't see it happening. What's the point in even having it if can't be seen? Sure, you can still put the fire in the ship out from the beach, but that entire scripted event goes unseen.
I think the ship even has enough hitpoints now that you can still save it even if you have a lengthy conversation with Arhu at the city gates - but the point is you still miss the scripted event with the NPCs because it's triggering well before you ever enter the city.