I am experiencing the exact same glitch! It is very frustrating. Did the OP ever find a solution? I have tried everything I can think of, including the obvious such as restarting my game, backtracking, etc. I don't want to start over this far in the game, but I saved after my fight with the Sanctuary Keeper, and so I am stuck. :( I cannot talk to anyone or do anything but walk around as they stare in the distance.