Retrieving the book for Rustleif. But when I talk to him he does not offer this quest. Anyone know why/how I can get him to offer this quest? Please help.

Can anyone help?

try looking on the wiki to see if any quests conflict with this one or known bugs....google skyrim wiki and then type in the quest givers name or the quest...

I cant remember the dawnstar thane stuff was early on in the game for me, so cannot recall all that I was doing at the time

Pretty sure you have to resolve the Vaermina quest one way or the other before working on becoming thane.

Yep, and the usual help 5 people in the Hold bit.

I've done the waking nightmare quest though. I've helped the captain. I've helped the miners. I can't seem to get the quest from Rustleif though. On my first playthrough I got it no problem. Now I cannot get him to give it to me.. WTF?

Might be dependent on time of day, or if they're doing/not doing certain activities... I had an issue with Idgrod the Younger in Morthal, couldn't get her quest, but caught her one time while she was just leaning up against a wall or post somewhere outdoors, and she gave it to me.

There's other mini-quests in Dawnstar that you can do to meet the thane requirements.

According to the guide you need to be level 22 and deal with a giant for the Jarl.

I got this randomly after killing a dragon in Dawnstar.
It attacked the town and Shadowmere got it to the upper corner entrance to the town. After it died and I looted it, I turned around to see a small group of Dawnstarians gathered, I just randomly talked to them and Rusty's conversation led to asking me to find the book for his wife. (I'm level 50, don't know if that applies.)