This cursed "inventory full" hassle will be the doom of me yet.
I've dropped items from every inventory area, including weapons, but it still refused to pick up his head, saying my inventory is full. What do I have to do, to pick this item up??

You can only carry one trophy head at a time, if you still have Nadir's head, turn that into the Royal Huntsman first.

I think the trophies don't disappear or decay (unless other items), so it will be there when you come back from your visit to the Royal Huntsman. I had a similar issue later in the game. It's a bit annoying when you can only one at a time but the super-monsters appear in very close locations.

Well, it ended up being irrelevant, I pursued the main quest and am in Vizima now.
I *think* I did the Royal Huntsman tasks out of order, probably had to do the Nidal one first, before I talked to him.

1: In your inventory, it goes directly onto the hook on the bottom right. (see pic)
2: The dice are not an issue, you can't drop them because they are quest items.
3: It makes no difference which quest you do first, the attached pic was doing Ozzrel first. It's not really irrelevant, if you complete all the Royal Huntsman quests in each chapter, he will reward you with your choice of one of the two best swords in the game.

hmmm... well then, I'm still confused. I did *not* have any other head on that hook, yet I could not pick up Ozzrel's head... it just said 'inventory full'. I could not get the quest to proceed any further, by talking to him. He was telling me to do the first quest, but when I went to the appropriate area by Miller's Building (don't recall the name), at night, no named creature appeared. It appears to me that I had simply stumbled into a bug in the quests??

That's sad, because it means I won't be able to get that sword at end of game... sigh.