1) turn on "SHOW HAT" under your options in game
2)
http://eqbeastiary.allakhazam.com/search.shtml?id=9383 I've seen this guy, as recently as last week. He IS in Everfrost Peaks. He's not the fun part. Finding the bones in the river is the fun part.
3) most all quests are working, some are not. If you aren't sure do a search under the bugs section to see if there is a post up about it not working.
http://www.project1999.org/forums/forumdisplay.php?f=6