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Has anybody done this recently?
I was helping out a newb, and suggested he do this, but he said he couldn't send it to the bank. User error, or a stealth fix?
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Well, I haven't done the dagger quest, but that happened to me on the Dread Spider silk quest...I was unable to send the first quest item to the bank, before or after canceling the quest. But subsequent ones I collected (with the original one in my pack) went to the bank fine. Sometimes I haven't been able to drop the blessed quest item until I cancel the quest from the menu - it just rubberbands back to my pack when I try to discard it. Other times I have been been able to drop it, and the quest item goes instantly *poof* and the quest log is subsquently updated saying FAILED. I have had various results with the quest items, but haven't done any serious study of what happens each time.
-Skylark