I remember doing that quest back before toolbelt existed. I had to kill a greater demon to get a steel hatchet. Obviously that wouldn't work anymore since they don't drop hatchets at all now.
But the thing is my dragon hatchet is on my toolbelt, so I don't need to have it in my inventory. But my question is is the quest still challenging? Having to kill a greater demon to get a steel hatchet barehanded was the most challenging thing about the quest. And I have a feeling that has changed.
I would love to test it for myself, but unfortunately quests can only be done once. And I'm not willing to pay 9 extra dollars for a new account to find that out.