I finally completed this, mostly by luck – and thanks to those who posted before me. As 61 necro, on my second attempt.
The courtyard IS a problem. The solution DOES seem to be related to getting at the Acolytes…..luring them out of the courtyard, and probably killing them….not sure on the last point. I killed 2 of them by luring them out, running up the ramp, and jumping over the side, then circling back. The last one I lured out and the courtyard scene ended.
I’m not sure how you’re supposed to kill the dragon….it seemed to take care of itself.
Back to that last Acolyte…..he was still in the courtyard after the scene ended….just wandering around. No NPCs seemed to notice. He only noticed me when I attacked….but then he nearly killed me. I totally agree with all the comments about this quest…maybe some tweaking or some better instructions given by the NPCs.