You can restore this quest after defeating Medusa (the rain has stopped).
Go to the inn and speak to a person (indicated by blue dot).
Go sleep in the inn, you will see an event on the night. Go outside and head to Pendrago – Castle Diocese. You should see “!” on your map on the Castle Diocese, head there and fight the mutant hellion (Beast Master); Visit THIS PAGE for the strategy. After defeating it, Pendrago will have lord of the land :).