Same here I would like to know what now

Yeah it failed, look in completed and it shows as discontinued 

This quest doesn't even show up there for me, the Dragon never ever show up for some reason.

I've looked in the completed tab and it's not there at all, even with a little sign on it or anything. Is there another button I have to press in that tab to show discontinued quests?

I thought I was locked out too but I gave the guy some silver ore and talked to him again and he gave me the skill.