I found an intresting glitch to use Bowerstone North with a sword out... maybe it's just one of those random glitches that happens sometimes but if not...
1. Take the Bandit Spy Extraction Quest.
2. Go to Bowerstone Jail (Don't talk to Tanya)
3. Assassin Rush through the Bowerstone North gates.
4. In Bowerstone North, as soon as it loads, run back through to Bowerstone Jail. Time should be frozen solid.
5. Go back into Bowerstone North and talk to Tanya.
6. Now do the quest with time frozen all the way through (Otto will be at the Windmill door)
7. When you get back to Bowerstone Jail, get your sword out, and walk through the gate to Bowersotne North. Otto will return and you will get a Sharpening Augmentation, but the quest won't be over, strangely. Now use your spade somewhere, and time will unfreeze and you should have your sword out! The only thing is that the quest will never be over, so all you can do is hero save.
This worked for me, but I'm not sure if it will work for you. I'm not sure if this has been discovered before, but I've never seen it, anywhere
(Note: Don't put the sword away, otherwise you can't use it anymore.)