SPOILERS AHEAD.
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To successfully complete the Isle of Despair quest, you need to recover the special glasses from Thorvald. The first step is to get inside to speak with him. You can do this one of two ways (three, with Drog's patch):
1) Talk to the ogre guard, and bring him a specific book to read. (UniversalWolf is correct; it's in a locked barrel on the docks, which will require stealth and lockpicking skill so as not to alert the town guards.)
2) Have the guard direct you to the pit master, and win the first battle in the pit. (Other battles are optional, but should you choose to run the gauntlet, you earn the respect of everyone on the island.)
3) With the patch and sufficient Persuasion, talk to the ogre about his lousy childhood, and he will let you through.
Once inside, you can get the glasses from Thorvald one of three ways.
1) Talk him into giving them to you.
2) Talk him into leaving with you. (This requires sufficient Persuasion, and that you not be a gnome.)
3) Kill him, and find the necessary schematic in a book in one of his drawers. (This will require you to make your own pair, or pay the spectacle-maker in Ashbury 1000 gold to do so for you.)
As you can see by these examples, while the quests themselves may be unmarked, there's always more than one way to skin a cat in this game. Best of luck to you.
By the way, while you're on the Isle there are other optional quests you can do. None of them are necessary to the main quest, but they add in-game color and provide backstory (although you may not realize their full significance at the time). Remember that once you leave the Isle after speaking with Thorvald, you won't be able to come back.
