sou1seeker

Definitely not. Pollaxe that drops off Falanroed is called Half Mast (Half-Mast)

I believe it's a mistake in the guide. I tried everything - raising my Deception to max, raising Honesty, other skills and attributes, it doesn't help. Bet you can't have both armor and a gold reward+reputation. I'd say more - you need to kill Penhelm outright without beginning a conversation in front of that house and inform Osric that you killed a few ppl for this one.