Some sort of bug with the "Finding Gadd" quest?

I completed the Finding Gadd quest a few days ago, and today I went to go do it again with a guildy who had not done it yet. When we get up to the point where have to walk Livia and Gadd around to kill the Ettin, and then talk to the Stone to go inside the dungeon, there was no arrow or anything over the Inscrip Stone for my guildy. If he tried to talk to it all he could choose was "I'll be on my way". But, I could talk to it and so then we preceded to go in and defeat the 3 bosses (and guardian at end) which _should_ have completed the quest for him. Instead, we were returned to Gadd's Encampment and his quest log stated that he had not even completed the "Finding Gadd" quest yet, and he did not get Livia added to his party either.

So is there a bug for that quest which does not let someone who has not completed the quest party with someone who has?

Was your friend the party leader?

Yep, he was.

Well, he went alone and was able to do quest and talk to Inscrip Stone, etc...