What is needed to activate this quest? I have already visited Hackdirt and emptied the cavern and met Dar-Ma and Seed-Neeus. All that is left is for her to be captured and I can get my +10 Mercantile reward. However, the quest is not triggering or else I have invalidated it by snooping in the Hackdirt cavern beforehand. Is this quest lost?

http://www.uesp.net/wiki/Oblivion:A_Shadow_over_Hackdirt, wait about five days after talking to Dar-ma. One would get a topic to start the quest in Chorrol after five days.

Have you killed the inn-keeper of Hackdirt before talkiing to Dar-Ma for the first time? If so, then the quest will never start.