Across two different instances of this quest, I've had different issues occur. The first was the same issue reported by imperialbastard above.
The second issue is that the brown quest notifer *does trigger*, but when I go to talk to the second village head, they say "No offence, but your duties may conflict/interfere" and then nothing else happens - as if they think I'm trying to start another version of the same quest?
If needed, I can upload a savefile here.