I am a 45th level Magician (Earth/Rogue). I initiated combat with the 3rd Telkine by throwing my traps down from the ledge above. This seemed to confuse the game logic. The Telkine turned to engage with me and I managed to kill him with a 40th level staff.
Consequently I was left with Typhon still in his chains and no portal to Olympus. I took a screen shot. It can be viewed at http://www.grynmoors.org/images/tqss.jpg.
I closed and reopened my game and fought my way back to the chamber to beat the Telkine again (this time waiting for him to release Typhon). Everything proceeded as normal.
Well, I haven't had that exact same problem, but I do recall that when the 3rd telkine is invincible, you have to go back to changan and talk to that woman near the general.
That'll make sure the telkine is vulnerable, maybe it'll work for a chained typhon as well