Be aware that the kill update does not always update; if you do not receive the update, talk to Roywinkle again to spawn the encounter, then kill the ghostly droags again. Repeat this process until you get an update.
It had been previously believed that the player on the quest had to deal the killing blow. However, this is incorrect, since I tested the quest today with two toons: one was on the quest, the other was not. The character not on the quest killed each droag, with the character on the quest just standing there, doing nothing at all. He still got the update.
Also, try moving away from Roywinkle so you can properly "protect" him. It appears if you remain on top of Roy, that the quest will NEVER update.
All group members must be within level range of each other, such that all get xp, or quest won't update.