This problem has happened to many players.
I believe the trick is that you have to select Elseramavin from the talk window - that you cannot type it in to get it to work. Sometimes you just have to be persistant - click on Elseramavin or type it in a couple of times and see if Erathsmedor doesn't finally accept what you are saying.
ALSO - Eraths doesn't actually GIVE you the sword - he opens a door to another room in which you will find the sword (so you may actually already have access). Be certain to let the whole narration as you pick up the sword play out because that will trigger the opening of the exit!
Good luck!
Wyv
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