So... I went to Port Bastok to talk with the ol' Monk master... Traded him the Knuckles and received the KI to continue the quest... The latent effect never went away and my curiosity never peeked enough to actually investigate the quest giver. /sigh

Who knows how long ago I could've actually finished the quest and moved on to other weapons but at least now I can, thank you Octaviane and everyone else for the suggestions. Glad to have it over with.