The Overlord refuse to become a ghost and materialize into Yngol's remains upon his throne, after killing him.

That's what he was supposed to do. So... Glitch or bug? Patch 1.2?

I dunno. But no helm of Yngol for me:-( and the quest? Wasted.

A word of warning might be:

Don't slay the Overlord in the room next to his throne room. That's what I did...

(and I killed him with magic only - didn't use the sword of frost. But as we know by now : I should have used my ps3 to smash his skull instead... Or my own.)