Edit - quest related items are gone too, such as an old letter from Prince Lhotun.
Edit 2 - I used an old save to try again and as soon as I spoke to Medora the main quest disappeared.

* A major fix has been done to the quest code. This fix would on rare
occasions cause the main story quest to shut down. It also prevented
the curse to be lifted from Daggerfall when you put King Lysandus's
soul to rest. Now when you complete this, a video will play and
Daggerfall will be safe once again.
