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Today I played Daggerfall for the first time in couple of years. After creating a character I started doing quests for innkeepers and merchants. One of them wanted me to retrieve a rare copy of Banker's Bet from a ruined stronghold. It turned out the place was chock full of giant scorpions and centaurs, with a troop of burglars as their roommates. It took me some three hours to crawl through that place, with several escapes only by a hair's breadth.

Finally, when I was starting to despair I found the desired book (in a room I had visited twice, but not searched carefully enough). So, after barely finding my way out, I read the book. I could practically hear my character exclaiming: "Seriously? I nearly died a dozen times for a dirty joke?" A bit of an anti-climax, really, and not the first time. Looks like Daggerfall's random number generator excels at unintended humour.

So, anyone else have had ridiculously hard time completing some trivial/laughable quest objective?

I think it's just that the game - either due to a glitch or as intended by the developers for a reason - sometimes randomly generates monsters in dungeons that are way out of the league for a low-level player character. I've frequently encountered that while playing the Betony demo, and the full game seems to be no different in this respect.

As for the quest you described, it is the particular copy of the book that is rare, not its contents, which could be trivial.