Ack. I had a problem similar to yours (screwed up DIALOG.TLK file), but I happened to run into the problem MUCH later in the game--just before the very last battle, meaning that my entire trip through ToB had to be scrapped. Comparatively, you're lucky: You can go back to your Final-Save in SoA and not have lost much. (Although, for what it's worth, that dialogue bug was in the only game I played with Ascension installed. Could Ascension be causing it? It's certainly a possibility.)
As far as fixing the problem goes, I don't see a problem with your install order.....you might have to reinstall the whole damn thing, or contact BioWare and see what they say. They might feel inclined to brush you off because you have MODs installed, but press them on the fact that the Sarevok conversation is a 100% BioWare part of the game, and they should help you.
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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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