This happened to me on my first time through the game, and I lost about 8 hours trying to find the elusive 'third artifact' by wandering around the area and carefully looking for things I'd missed.
The only solution other than Raze's fix is indeed to reload an old save game, and kill Josie in a different place so that she drops the staff clear of the wall.
This is probably one of the most frustrating bugs in the whole game.
