This is just a patch 1 glitch. Completed this quest earlier no problems. Updated to patch 1 and Gale started talking about this thing already long past.
He's pestering me about me having made a deal with Raphael about the crown, although I haven't even seen the fiend since before Shar's Gauntlet, he never turned up in response to slaying the beast. So yeah, lots of things broken around Raphael it seems.
