I've run into bugs with Morigah before and i don't think it's at all uncommon.
You'll probably have to use a utility created by Donald Tipton called "THAW" or something like that to reset the quest.
I can't say if that will break any other quests however.
This information might be on the UESP wiki, not sure.
THAW can be found here:
http://andux.svatopluk.com/
On the left.
From THAW:
Thawing a Main Quest
THAW will restart one of the seven subplots from the main quest in Daggerfall.
You can use THAW to recover from inadvertently saying No to the wrong NPC at the wrong time. Or to revive a subplot which won't start for some reason.
The command line syntax is shown below:
thaw slot# aSubplotName
where slot# is a number between 0 and 5, corresponding to one of the six saved game slots, and aSubplotName is one of the seven main quest subplots from the following table:
Aubk-i Cyndassa Elysanna Helseth
Lhotun Medora Morgiah
Case is insignificant.
Note that THAW is indiscriminate. It will always restart the requested subplot, even if that part of the main quest has already been successfully completed.
Installing THAW
If you unpack THAW into a directory different from the Daggerfall game installation directory, you must tell THAW where to find the saved games to operate on.
If you use a Windows shortcut to launch THAW, make the working directory in the shortcut the same name as your Daggerfall game directory.
Or, you can add the TES2 symbol to the environment to inform THAW where to locate the saved games you want to edit:
set TES2=aDirectoryPath
where aDirectoryPath is the name of the installed game directory for Daggerfall. E.g.
C> set tes2=g:\game\dag
C> thaw 4 elysanna
Donald Tipton
April, 2001