I've defeated the Valsharess and Mephistopheles has freed himself, but he and my character are just staring at each other. Nothing is happening beyond that. I can't even get my character to move! What do I need to do to fix this problem? Thanks in advance for any help given.

Scourge2

I had this happen once. I was not able to trigger it forward.

You could export your character, and start chapter 3 with that character manually if you have it unlocked. Though you might lose your henchman if you do this.

Best if you have a save before this happened. It's kind of a fluke. I played HotU probably ten times, and I only had this once, and repeated that fight many times because I am trying to grab some gear off the Valsharess before the cutscene.