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I traded the rat's tail for the adamantite, and then gave the adamantite and old sword to the dwarven smith in the underworld.

Now he's hammering away at his anvil, and tells me not to rush him. Is there some amount of time I have to wait before he's finished? Is there some in-game event I have to complete?

When will my sword be ready?

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up vote 2 down vote accepted

Excalibur will be ready once you've set foot on the moon. As soon as you've done that, you can turn around and go back to get the sword.

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