This fix did not work for me. I followed the steps:
1. Talk to the Valera family and fail Sinking Feeling
2. Go through with the vault quest to rescue Belda.
3. Speak to the Valera family again and they'll ask you to kill Ezalli.
4. At this point the option to request peace talks from the Valeras and the Bardottis does not show up in the conversation options with either head of family.
I tried a different variant of
1. Speak to Ezalli and request peace talks without triggering the end of the Sinking Feeling quest.
2. Talk to the Valera family and fail Sinking Feeling
3. Go through with the vault quest to rescue Belda.
4. Speak to the Valera family again and they'll ask you to kill Ezalli.
5. If you start a conversation with the head of the Valera family at this point the conversation option to request peace talks does appear however
6. After requesting peace talks from the Valeras nothing happens and every time you speak to the Valeras after that they just keep asking if you have killed the Bardottis. There are no new dialogue options with the Bardottis either.
At this point I've spent 4 hours trying to resolve this dumb quest peacefully and I'm ready to chuck the game in the garbage.
