I think there might be a problem with the Mermaid ring, if you already looted everything in the Underground before the update, the chest that drop the item do not respawn, even after beating Toeeater. Making the progress impossible
Viewing post in Rogschard, Lords and Loyalty comments
The ring now drops automatically from beating the Toeëater Nullbolt fight in the underground north. This is irrelevant of the state of the quest