Thanks for the insight. The faction levels thing is good to know, but that isn't what's stopping the quest from working. Though I've taken the faction hit from killing naggy now, the mob still cons me as dubious (although the table shows me at 1500 with the faction which should be max ally). That's where the problem lies for me--though I appreciate you nipping my next question in the bud where it comes to faction levels.
So, why does the mob not con as ally to me if I have it done that way? Congdar seems to be pointing me in the right direction, but I thought I'd already done that. I don't want the "zoner" mob to be on ring of scale faction, but on the new faction I created (1993

and I thought I'd done that, but it doesn't seem to have taken. Could you elaborate as to how to properly perform this step?