» Wed May 16, 2012 5:23 pm
Happened to me and it's the worst bug I've seen so far.
Here's how I cleared the bug. First thing that I did (not sure whether it's essential but I think it isn't) was to reload and kill Madonoch. Fortunately, I saved at the point where you're told to kill Grisvar the Unlucky, because I sensed that this could be done either way. Also fortunately I had ramped up one-handed weapons, bound sword and conjuration, because getting through the ruins would be no joke if you were dependent entirely on weapons and armour.
Okay, now I walked around Markath and checked that I had no bounty with the city guards. So far so good.
Then I went to the shrine of Talos and found that I was in the loop again, with those guards wanting to kill me. So I ran outside and paid my bounty to a city guard, who sent me to prison as normal, not to the Mines.
Then I went back the Shrine of Talos and confirmed that the loop was ended. Eltrys had 811 gold on him, so I didn't lose much in the way of gold. Of course, I didn't get the Armor of the Old God, but at least I haven't ruined an entire city for myself.