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AH, im getting a picture here. Did you kill the beholder up top by the pit? Where Gaal was? or did you kill the beholder in the beholder caves down beheath the crypt area.
I think you took the rod half, went back up to where Gaal was (in the sewers) and killed the beholder there right? thats not the Unseeing eye beholder. There is a whole other 2 areas you need to do before finishing the quest.
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