Tekmoor - any crashes? Black maps? Played around with Raze's lost items editor and didn't follow his instructions dot by dot?
No crashes, no black maps, and I don't even know what Raze's lost item editor is...
Another possibility: Did you clear the area around the house? Were there powerful enemies? Insane/master insane skeletons? They could've killed them.
If beetles, wolves, and frogs could've killed them then this is a possibility (they're all around that area). However I've never seen any skeletons up there.
Or maybe the Sword was removed from the Stone?
Yes, however about 10 minutes later (after killing him about three times) I realized you had to put the sword back. I didn't leave the area with the sword.