That's really weird! Sorry you had this issue.
You need to talk to the actual Eastwall blacksmith (the guy at the back with the forge), not his apprentice (the one on the counter). In order for the quest to progress, you need to have at least one mysterious orb in your inventory (either from chapter 4's dungeon, from the area behind the kobold king or from the lake monster quest) and having heard the password from the mysterious guy (either on chapter 4 or by completing the lake monster quest).
This is a really complex quest that ties up with several others and may be progressed in quite a number of ways, so it's possible I messed up somewhere. If that's the case, I'm really sorry! ;-;
Also, the debug window will only advance you through the main quest. You still need to do all the side quests yourself, so using it shouldn't do any good in this case.
I'll check again all the quest flags, but for now what I can tell you is that the donkey sidequest becomes available at the end of chapter 6, right before you pay the receptionist. (If it doesn't show up, either advancing to chapter 7 or reentering the guild building should do it). And for the lake monster quest only becomes available after you have both the donkey siquest and chapter 7 at the stage you have to pay the receptionist.
I hope that helps!