I'm having pretty much the same trouble as Pounder is, only I'm not getting as far. I talk to Captain Steffan to start the quest, wait the three days, talk to him again, he goes and mounts his horse...and for some reason rides into Cloud Ruler Temple and up the stairs. He ends up sitting in the area where the two Blades are usually fighting, doing the twitching thing that Pounder described. Waiting hasn't helped so far, nor has using the console to move him outside the temple: he just heads right back in.
I don't know whether this is the same problem, a new one, or I simply messed up the install (unlikely but possible). In any case, hope you get it fixed, because the mod really does look and sound great.