I have completed fable twice now and was in the exact same situation all you have to do is go to the bloodstone tavern and buy a beer then go give it to the pirate if it is not beer it is water but it is deffinately 1 if it will not even allow you to buy those then you will have to go to the pirate again and listen to everything he sais until you are certain that he has stopped talking then do waht he asks the quest is good you have to go on a treasure hunt fight this boss who is really crap then find all his treasure on this island which is hard there is one behind a waterfall you will know what i am talking about when you get to this stage hope it works this stage of the game his very close to the end and is the best part of the game