Aha! We aren’t ignoring you, but we couldn’t determine a repro until very recently. A fix is in testing, but I don’t have an ETA for when it will reach the live servers.
Long winded explanation:
Basically, there are several dwarven relics scattered across the lake, only one of which is the item you’re looking for. If you pick up 6 relics without finding the scabbard, it will mark it and update the objective to “Pick up the scabbard.” If one of the relics you picked up was the scabbard it would complete the search and move on to the “Escape with the scabbard” step. BUT… If you got close to the scabbard (without picking it up) it would mark the search as complete, but not advance to the “Pick up the scabbard” step. You can swim around and interact with the relics and eventually you’ll find the scabbard, but since it’s not marked it’s very hard to find.
I’ve fixed it so the “Pick up the scabbard” step (and a marker on the scabbard) will correctly appear when you get close to it. This is also why we had such a hard time reproducing it—you have to get close to the scabbard but not have picked up 6 relics in the mean time. Since it randomly changes spawn positions, it’s a matter of luck.
(edited by Jeffrey Vaughn.1793)