I think i made a big mistake. I agreed to the ore merchants alloy scheme before
I had the mace of disruption. I've already given the alloy to Sarles etc.
Now all the ore merchant will say is "pleasure doing business with you" I want to get the illithium to make the mace+2. Is there any way to get the ore merchant talking/trading with me again.

I don't think you can, if you give the alloy to sarles and keep the pure illitium you can make the mace. You could always find out the item code and import it with the CLUAConsole.

No there isnt any way to get her to trade with you again. When you were doing to quest you could of asked her to give you substitute illithium and give that to Sarles so you could then use the real illithium to upgrade the mace.

I did give Sarles the fake illitium. Now, though the merchant won't tell me who her source for illithium is and the dwarf (can't remember his name) won't talk to me or start me on the quest without the merchants prompt.
I also won't create/cheat. It's a personal thing.

If you're careful, you can choose the conversations that will convince Jerlia to reveal the name of her illithium source....and THEN have her make you the alloy. You can then follow the directions she gave you and get yourself some illithium, and the next day, pick up the fake.

Try talking to her source anyway, he might spill the goods.

Obviously I should have found out about the true source first and then had the fake made. I keep trying to get the dwarf to talk but he just keeps telling me that "he" has had a bad day.

i tried to give the fake one to the sculpture but he refused to shape it for me. is this a bug? would the priest accept the fake ilithium (it doesnt seemed to be shaped though) when i go to the temple?

Try Neb's house, it may be there.

Legolas, don't worry about that fake ilithium. Priests always accept that chunk of alloy, no matter which temple you are working for.

To get it back without cheating, kill Sarles and take it.