Did we miss anything in this location? Is there something we didn't discover? Let us know!
Background
The "right" way to trigger this quest is to read the note "Contract: The Phantom of Eldberg" on the notice board in Arinbjorn in
Ard Skellig (#1), but you can also receive it (out of the blue) at the end of the quest
The King Is Dead -- Long Live the King.
Walkthrough
From the note you'll learn that a wraith of some sort is haunting the Eldberg Lighthouse, and that Jorund of Arinbjorn is willing to pay for its removal. You'll find Jorund in Arinbjorn's inn. However, when you go in, two peasants named Kori and Kraki will try to pick a fight with you. No matter what you say to them, Jorund will step in and diffuse the situation, and the two peasants will leave.
When you subsequently talk to Jorund, he'll tell you three things: that Mikkjal the lighthouse keeper is missing, that the two men he sent to investigate the disappearance also went missing, and that when he gathered some men to investigate the matter himself, he spotted a wraith on the beach by the lighthouse and turned back. So he'll ask you to deal with the matter.
As you approach Mikkjal's house south of the lighthouse (#2), you'll run into a few regular wraiths, and you'll also spot the bodies of the two men Jorund sent to look for Mikkjal. Then at Mikkjal's house, you'll find Mikkjal hiding inside. He won't have any clue about where the wraiths came from or what they want, but he will give you the Lighthouse Key. This encounter will earn you 25 xp.
When you reach the lighthouse (#3), you'll see that it is covered in strange symbols. When you examine them, you'll realize that there's a curse at play, and that you must be dealing with a Penitent, a special kind of wraith that haunts "particularly foul sinners." Since Mikkjal is the only person living in the area, you'll decide that he must be the subject of the curse. This realization will earn you 25 xp.
If you go into the lighthouse to look around there as well, then you'll find a Letter to Lighthouse Keeper in one of the shelves. The letter will indicate that Mikkjal sometimes turns off the lighthouse light when a particularly valuable ship is due to pass by, and that he and a partner then loot what comes ashore. This will give you a pretty good idea about why Mikkjal got cursed.
When you return to Mikkjal, he'll claim that ships crashing into the rocks is just the natural order of things, and that he hasn't done anything wrong. He'll also want to stay in his house, but eventually you'll convince him to light the fire at the lighthouse, which will dissipate the fog and allow you to deal with the Penitent.
When you return to the lighthouse with Mikkjal, the Penitent will be there. Mikkjal will head inside to get the fire going while you start the fight. The Penitent will summon wraiths to help it, but otherwise it will be much like any other wraith, and so
Specter Oil and the Yrden sign will help you out. The main difference here is that while the island is misty, the Penitent will be much tougher than otherwise, and so you might want to play defense and focus on the lesser wraiths until Mikkjal gets his job done.
When you eventually kill the Penitent, you'll find a
Wraith Trophy, a leveled version of the steel sword Ashrune, and more on its corpse. Then if you found the letter in the lighthouse, you'll have to make a decision about Mikkjal. You can either let him stay where he is, or you can force him to leave. This decision won't affect the quest. If you didn't find the letter, then Mikkjal will just stay.
When you show the trophy to Jorund, he'll pay you your negotiated fee, and you'll also earn 260 xp. Then he'll offer you a drink, which will lure back Kori and Kraki, the peasants who insulted you earlier. This time they won't be put off by Jorund's words, and they'll attack you. This will trigger the quest
Stranger in a Strange Land.
1 - Arinbjorn
2 - Mikkjal's House
3 - Eldberg Lighthouse