shortfuse41: Solved this one myself, accidentaly, I'll leave this here incase anyone else has the same issue later. After running back and forth from the statue back to town THREE straight times just to make sure I did it correctly, on my third attempt, I entered the clerics's temple. My fighter, who is not , and cannot be a member of the temple guilld, was promoted to Paladin. Despite the fact that I accepted the promotion in the Armory, in the fighters guild... Strange, the game coding must have been written that Paladin is a cleric upgrade class only, despite being an option to upgrade as a fighter in the fighter's guild. Hope this helps anyone else with the same issue.
That is not a bug. If you begin the ascension quest for paladin in the fighters guild, you will be told to pray at the statue and then return to the temple to complete the quest .It's the same with some of the other ascension quests - you can take them at more than one guild, but have to return to a specific guild to finish it.