I have cleared and fully explored all of the Archmage's manor.  I have recovered the missing drool covered crystal gem, I have learned the combination to the vault from the Tattered Note and viewed the soul in the lab but when I try and open the vault door it doesn't bring up the interact dialogue.   When I mouse over the door, in red text it says "Unlocking this will require the proper key." and when I click on it, in the combat log it gives the same message in white text.  

Am I missing something? 

You need to interact with the round shaped sparkly object next to it. There you can insert the gem and use the combination.