I just spent most of the morning soloing Katzenstine's. I beat Dr. Kat and Grunk gave me hiw normal "let's build a clockwork", but that was it. No question mark over grunk's head, no instructions to collect crates, or assemble the clockwork. No clockwork to talk to.
My quest book says Discover Location Meowarty Hideout in Unknown., so does the text over my experience bar and there is, of course, no arrow.
As this is the main story line, if I can't talk to Grunk, I can't continue.
Had the exact same bug occur to me this morning as well. I was able to move on to Smogger and kill him, but could not complete the quest. I had to leave and let the instance reset in order to finish it.
The second time around several hours later I was able to complete it, although I got "stuck" at the top of ramps going from one roof top to another twice and had to port home and re-enter to get unstuck.