I've seen a few posts on a Timmy the Icepick Bug in Marleybone and now I've run up against it. I've beaten Timmy, and was given the password, but when I go back to talk to Pugsley (? I believe that is the NPC's name) he keeps telling me to go beat Timmy. My quest page shows that I need to talk to Pugsley and does not show Timmy anymore.
I hope this can be fixed soon, as it has stopped my progress on the storyline! I know it is a problem for at least 4 other players...
(I read this on the Wizard101 Central.com page, so thank them.)
To get Pugsby to accept you have beaten Timmy, you need to have walked to him, not ported. Go to Pugsby and start to walk up the ramp towards the Midnighters (Red Name Burglars).
Once you have stepped foot on the same platform as the Midnighters, you should hear the horn of the quest being complete. The key is to look where your Quest Finder arrow is pointing. If you beat Timmy and port to Pugsby, you will see the Quest Finder arrow pointing AWAY from Pugsby, toward the Midnighter's rooftop.
I think part of the quest after you defeat Timmy Icepick is called "Find William Pugsby." As stated above, just follow your arrow and after you see the "Goal Complete: Find William Pugsby" you'll see "New Goal: Talk To William Pugsby" I think and the just go back down and talk. It's weird but it's how this works...