Having done this on a couple of characters now (multiple times due to the bug) and most recently just today, I can say that the ONLY way I have been able to successfully complete this quest is to fervently protect Trahearne. He MUST NOT die. I have tried every variation on how I speak to each NPC, when, what line, etc. However, if Trahearne has previously died, it is a no-go, despite being able to get most of the NPCs to follow you to the next wall (including Trahearne, but the next step will just not trigger).