Current walkthrough:

"20. Travel in the canoe to an area north of the Trollweiss Hunter Area. Enter the cave and head south and speak to Jhallan to find that he still needs to locate a peaceful spot for his hibernation.

 

21. Go south-west until you come across an icy spot that is not near any monsters, light, or running water. Jhallan will arrive and confirm that the spot you have found is good.

 

22. Bore your four sapphires around Jhallan and click on him (it says "Enchant-sapphires") to once again encase him in ice. He will provide a Tail of the Muspah, Erjolf's trophy.

 

23. Exit the cave and use the canoe to return to Erjolf. Speak to him to give him the Muspah Tail and complete the quest."

 

 

Updated walkthrough:

"20. Travel in the canoe to an area north of the Trollweiss Hunter Area. Enter the cave and head south and speak to Jhallan to find that he still needs to locate a peaceful spot for his hibernation. Ask Jhallan to follow you.

 

21. Go south-west (blue spot on map) until you come across an icy spot that is not near any monsters, light, or running water. Jhallan will confirm that the spot you have found is good right after talking to him in that spot. If you go to wrong spot and talk to him, then he will complain why that spot is not good enough.

 

22. Click on him to bore your four sapphires around Jhallan and you automatically enchanse him into the ice. He will provide a Tail of the Muspah for him not to be bothered again by thropy hunter Erjolf, Erjolf's trophy.

 

23. Exit the cave and use the canoe to return to Erjolf. Speak to him to give him the Muspah Tail and complete the quest.

 

Note: If you destroy or loose Muspah tail, you can get another from the cave where Jhallan is hibernating, under the Mahjarrat Ritual Site."

Hi Cemtey, I've updated the guide with some clarifications and added you to the credits. Thanks for pointing these out! :)