I found what it was -
I reloaded to a point before entering Labyrinthian and went through it again, this time saving the game before entering the final section where Morokei is (Labyrinthian Tribune). Going through Labyrinthian Tribune I got to the hallway where the soul gems on the pedestals are firing spells at you. I did an Unrelenting Force shout to try to knock the soul gems off the pedestals which caused enemies to become aware of my presence. Looking at the top of the screen to count the red dots to see how many were after me I noticed the name of the enemy which the game said was pursuing me - Enthralled Mage.
Apparently it's possible for the Entralled Mages to notice your presence and begin to wander around looking for you. Once this happens they don't return to where they should be and begin feeding Morokei power again. This makes the quest impossible to finish as the scripting requires you to cut these lines of power before you're able to kill Morokei.
So I reloaded before entering Labyrinthian Tribune and tried again. This time I entered and just ran straight through all the way to Morokei - I didn't do any shouts, didn't cast any spells, and didn't stop to fight anything. I just ran, ran, ran while drinking health potions to offset any damage I took. When I got to Morokei the Entralled Mages were in their proper positions feeding Morokei power and I was able to complete the quest and obtain the Staff of Magnus.
I then went backwards through the level to get the word of power and clear out the enemies (which was easy to do because they were all facing the other way ha ha).
Hope this helps someone. Happy adventuring!