The quest "Soul of an Ash Ghoul" ( fbmwMGSoulGem2 ) can be finished, but has various problems.
Skink-In-Tree's-Shade says: "The soul of any ash ghoul should be suitable. I believe the nearest ash ghoul is in Yakin. Scrolls are more reliable than spells, so take these scrolls, and these two soul gems."
The diary says: "Skink-in-Tree's-Shade asked me to get the soul of an Ash Ghoul. Skink told me the nearest Ash Ghoul was in Yakin, but any Ash Ghoul will do. Yakin is on the mainland just northwest of Tel Aruhn. From Tel Aruhn, I just need to swim or fly across one island and then continue northwest. (A grand soulgem with any grand soul will do the trick)"
Both contain false information. The only way to finish the quest is to go to Yakin and kill a unique ash ghoul (fbmwAshGhoulSoul) that is enabled after the quest is started. Once you have killed the ash ghoul, you loot a unique soul gem from his body, called "Soul of an Ash Ghoul" (fbmwSoulAshGhoul), then you bring it to Skink-in-Tree's-Shade, who will take it and complete the quest.
I have tried giving up a grand soul gem with a grand soul inside, of both the Oblivion and Morrowind variants, and they were not accepted to complete the quest.
So something must certainly be changed. Whether to change how the quest works to adapt it to how it was in Morrowind, or to make it fit the journal, or editing the journal and Skink's dialogue to make it clear what you should do.
In the meantime, I have added this topic to the forum, so that players may google it if they can't find out a way to end the quest without using the console.