I have the exact same problem with very little variation of the original poster.
(I also had the "dagger" issue but after a few retries it worked out)
1. I did pick up the message scroll from the dead body in the "White Sands" area.
2. I did let Laussa walk all the way off screen.
3. I killed Wyrmias in Gedron after he changes.
I went straight and retrieved the guy's body, then went and talked to him to put him to rest. I had his body in my inventory when first initiating conversation. He told me his story, then gave me the bottle. Talked to the genie, wished my three wishes with the third being 'help me fight'. He said my wishes were all consumed and then teleported me outside. It was rather empty and peaceful in the desert. I waited... nothing. I walked into Teaq, and the Halfling yelled at me to go get to it. I walked back outside and appeared once again inside the buried city.
I tried reloading it and only using the 'help me fight' wish. Same result. I reloaded and tried leaving the buried city without participating. "The army gathers outside, are you sure you want to leave?" Nothing.
Same.
But I do have a lot save files, including one from before I come back to Teaq after winning the second village over and another after I got the genie.
I can send them.
(The jpg trick doesn't seem to work)
Can anyone please help me? :'(
rmeakins maybe?rmeakins: Can you post a save up just before this happens? I wonder if I can reproduce it or if it's possibly a system dependent issue. Also maybe there could be an unusual solution (like turning on/off walking animations or something)
If you rename the save file as an image (like SAVE01.jpg) then you can attach it to the gog forum.
Sadly this doesn't seem to work. :(