Just put the Fallen Paladins on hold for now--go and do some other quests, get your Reputation back up, and when it's around 12 or so, try asking for the Goblet again. That should put the quest back on track, and you can then complete it. And if it does turn out that the quest has crashed & burned, and you'll never be able to complete it in this game.....it's no big deal.
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Volothamp's Comeuppance
Everything you ever needed to know about the entire Baldur's Gate series......except spoilers.
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