Back in the game again. With a lot of Googling, I discovered a player with the same problem. He tried everything when talking to Theodor and then noticed that there is a blank space above the only line in the dialogue box, which is END. When he clicked on the space, the correct response is given and the game continues on. Maybe I'll find the troglodytes yet.
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I finished the game and enjoyed it though it is not as good as the other Gothic games. Still, good to roam around the Gothic landscape again. I even met up with three troglodytes at the very end, though they didn't have the quest items I was seeking.