My only possible theory is that somehow, this has something to do with the shivering isles. I have the standard ps3 disc, and a week ago I tried out the shivering isles using my save file and a friend's GOTY edition disc. I didn't leave the isles "properly"; I just loaded in my disc and loaded up my save file, still in the isles, and was simply teleported into the imperial city. When I first loaded my save I experienced slow load times and some lip-syncing issues, but when I quit and loaded a second time, everything went just fine. I didn't experience any serious glitches or anything out of the ordinary until today. This glitch svcks. Anyway, I plan on loading my save file using my friend's GOTY-edition disc again and seeing if that somehow, magically, does the trick and I can get on with the quest. It doesn't seem likely but it's the only thing I can think of at this point.
Does anyone else have any other suggestions, experiences, or other advice? I do have a back-up save...but unfortunately, I haven't saved over my back-up in about a week and I've progressed a LOT since then, because I've been playing Oblivion like crazy. And considering I can't fast-travel/leave from paradise without completing this quest...I'd be pretty frustrated if I ended up stuck. >.<