Paladins always refuse a reward. Its in their nature to do so. So when i found that out, i put my barbarian or the thief up in front to handle the conversations. When it came to the moonblade area, i played that part twice cause i made the same mistake as you did and then i took my thief to get the 2k gold. Yup the blade isnt worth having later on, there are other blades which are better. I would say part with it for 2k and get something off a merchant later on.
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