Well, this quest still has problems as written. Whether or not you should be able to easily figure out what Crosh wants you to say if you reply "No" to his question as to whether you have seen "that creepy fellow that lurks around down there," he should not be clueless if you answer "Yes" because you have, in fact, seen that fellow. It wasn't until I read a walk-through that I figured out that the required answer was "No" and not merely that Crosh wanted some other affirmative answer instead of "Yes," the creepy fellow's name, etc. Now, you might prefer to believe that I am simply stupid, but I think the quest could be improved without a lot of effort and condescending crap.
Now, I freely admit that the quest dialogs have been improved over the last couple of years, but there are some things that would help make them better. It helps to realize the extremely limited vocabulary and recognized phrases complicates things more than they need to be. Frankly, the original text adventure, The Colossal Cave, back in the 1970's was easier to communicate with than many of the PlaneShift NPCs have been. Granted, you knew then that you were limited to a typical maximum of two words per statement usually in a verb-object form and PlaneShift tries to provide for "richer" expressions in many cases. However, the inconsistency is often a problem in it's own right. So, some suggestions:
If you want players to recite lines in a script, give us a way to learn our lines. Better yet, don't require players to recite lines in your NPC script just so we can play along in your production. Let us simply watch if you aren't prepared for reasonable variation in response to your NPC.
If your NPC asks questions that can be answered positively or negatively, have it act appropriately to both responses. For example, Crosh should not require you to lie just to complete the quest.
If you require specific responses, try to ensure that the specific response can be clearly determined or that it comes from selecting a response from an explicit list. However, this will always be difficult to get right when the response is not simply "yes," "no," a number, etc. It is a major pain that some dialogs require a noun in the response with one or more specific adjectives while other dialogs require you to omit any adjectives used by some other NPC in the quest even if those adjectives seem necessary to distinguish from a more generic question or comment (e.g. trying to get the Hydlaa gem cutter to perform a specific service). If you want to keep the illusion of more open-ended dialogs, then perhaps the server should log responses to non-trivial questions (i.e. "marked" questions of some sort) so that the quest maintainers can see the range of answers given by players. This would enable the maintainers to ensure that the NPC can accept one of a set of "correct" responses that players are likely to give. In fact, this feature would be very helpful in those cases where you expect a player to answer a riddle, both to ensure that you credit most, if not all, "correct" responses and to help guide the maintainer in refining the riddle itself when player answers indicate that it may be necessary.
For a game with an emphasis on role playing, the NPC dialogs are one of the things most likely to detract from that goal, either because of the dialogs themselves or because of the insistence that the players solicit help in-game from other players rather than use other out-of-band channels. Sure, if the questions can be phrased along the lines of "where is..." and "who does...", NPC dialog related questions can be "role-played." However, the nature of the problems people have with the quests and dialog usually end up with lots of in-game "tell" dialogs (if people shift over) or simply a lot of "out-of-character" conversations with most of the discussion in a given area delimited by brackets. (Note that this is a problem with questions about game mechanics as well. It is one thing to explain in character what materials may be needed to craft something or to explain who provides the necessary training and tools, it is another to try to explain exactly how something like steel is actually crafted in PlaneShift when there is, at best, a tenuous relationship between the physics and engineering of Yliakin and our own universe.) Keeping players in character is hard enough without requiring them to engage in out-of-character discussions in-game rather than in the forums or the chat channel.