Maybe there's something in his inventory you need to take? I don't know but if that doesn't work you may have to restart from an earlier save.
That's never happened to me but today I go to the market area in Solitude and as I'm talking to someone a dead dragon literally falls out of the sky lol. It fell right next to me and did that whole "You got a dragon soul" sequence. I don't know how it happened but I got a free dragon soul out of it hahaha.
Anyone else just casually walk the streets/mountains and see a dragon fly by but not attack you and its not listed on the map? I tried chasing it but the fucker was gone, I wonder how many dragons are in the game..