Apparently so. It is a one-time cut scene conversation when he approaches (just south of Stormfist castle), so it doesn't surprise me that he would disappear. If you know his name, or can re-load an old save to find out, you may be able to re-set his location;
Reviving dead NPCsJezza, at least, has found higher damage bas.tard swords (about 80-140) which are one handed, so don't feel too bad about missing the two handed bas.tard sword from the knight.