This is gamer advice, not modder advice, as will be apparent:
Had that exact same problem. I CLUA'd in the 3 items he should give you, and went on with the quest based on the information. But since he didn't complete his dialog, there is no way to return to him to report that you completed the quest. I just CLUA'd myself to Garotten (map location bacame reachable after i CLUA'd), and did everything there. An annoying lack of closure despite most of the content still being available. Keep the walkthrough at hand, and have a look in NearInfinity for the item and area codes you need to CLUA.
For Garotten, I recall it was an area with number 2000. "BH2000"? I can't remember exactly. Type X when you are in Restenford, then you'll know.
For the items, go to NearInfinity, and look in the ITM folder for items with the same code (starting with "BH" if I guessed right), and you should stumble on the button, string and piece of cloth.
And afterwards, you CLUA back to a main game area. It will lock out Bonehill areas and reopen the rest of the world map.