Why did you correct someone who was right?... You have to get in eventually.. what you said pretty much states that you Never get into Fargrove with Okatta there... if so.. you cant get in to kill him.. so you just never enter the city ever again... game over =P
Look at it this way.... If you leave Fargrove and do EITHER of the two following, the gate to Fargrove closes:
1. Pick up the Moonstone (closes so you cant use the moonbridge)
2. Start the quest at the House of the Tiger.
Now the gates only open IF you do the following:
1. Start House of the Tiger quest
2. Speak to lady at Inn
3. Speak to Lady at Apocathary (kill her husband) then speak to her again
4. Speak to the Elven Lord
5. Finish the Trial of Elders
6. Speak to Elven Lord again and then journey to House Fathien
7. Kill the Elders and retrieve Argalia (you dont have to rescue the Apocathary's son)
8. Return Argalia to Elven Lord, Kill the last Fathien guy.
9. Use the Mirror from the elven Lord to speak to Elimdor in the Tower
10. Return the Horn to Talendor
11. Speak to Elimdor again afterwards.
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Those are the steps... in order.. of what you should do... and there are enough bugs during those steps to ruin your game easily... from the Apocathary's Husband getting stuck in the wall (once for me) to the trial of elders bugging out and stop spawning spirits, to the Lift for Elimdor not working.
So if you hit a snag (anyone) then go in reverse order to see what you missed.