So Falion wants a filled black soul gem to cure my vampirism and says I need to kill someone. Fortunately, I already have a filled black soul gem I got as loot, so it seems like I'm off the moral hook. However, during the ritual Falion invokes the powers of Oblivion and offers them the soul to torment for eternity. I can't stop the ritual in game, but I reload under the assumption my character would stop the ritual.

Now for the questions. Firstly, does anyone else's character have moral issues with this quest? Secondly, if I don't get cured will I be unable to finish Dawnguard on the Dawnguard side?

Dawnguard will be out of your reach if you stay a vampire. I went ahead and did the ritual, and after the Dawnguard was finished, and I got the "special" items I was sent to find, then one can become a vampire again if one wants to. My character did not like that the ritual called on the powers of Obilivion, but I also looked at it as if that was where the soul belonged. In Obilivion. Hope that made sense.

You left the disease long enough to become a vampire, it is really hard in this game to NOT do that on purpose, and it is explicitly stated in-game that it is so easy to cure that only those who want to be a vampire or are completely separated from society leave it. This means you invoked the power of a daedric prince already, which means only the power of Oblivion (and possibly even the same Prince) can take it away.

And yes, unless you cure it, you will unable to finish the dawnguard questline.

Actually, my character was given two choices to enter the Soul Cairn: become a vampire or entrust Serana to partially soul trap me. Although Serana seems fairly nice for a bloodsvcker, I didn't feel like trusting her and the Ideal Masters with my soul. So I took the vampire route instead.

This reminds me of when I got myself cured of WW in MW-BM. I was force to kill an innocent. Tore me up and my character spent the rest of his life trying to amend for it.

That sounds interesting, but I'm not sure what the acronyms mean. Cured of Werewolf in Morrowind Bloodmoon? I played Morrowind, but never got the expansions.

Yeah werewolf.