Did the quest 3-4 days ago and it worked fine. If you don't have enough faction without Alliance/Benevolence then that could be the bug.
I say this because the final turn-in was also bugged as not working with indifferent faction boosted to amiable..
http://www.project1999.org/forums/sh...t=incandescent It worked for me at that time, too, with unmodified amiable faction.
It would seem Benevolence is breaking some quest NPCs that require a minimum faction, but it's really hard to say with such little information.
Edit: Oh.. Did you give her exactly 50 gold and the wand or 5pp?