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I picked these up at Frostflow Lighthouse hoping they'd be a decent decoration for my home, but it turns out they're a quest item.

As far as I can tell, I've already finished the quest. Is this a bug, or is there something else I can do with them?

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up vote 9 down vote accepted

If you re-enter the lighthouse, there is a locked door that leads to the top. You should have the key (if memory serves, it's looted some time during the dungeon) to unlock it. Climb up to the top, and eventually you'll reach the brazier. You can interact with it, which places Habd's remains inside, and lights the lighthouse. This also gives a nice permanent buff, called "Sailor's Repose" which increases healing spell effectiveness by 10%.

Neat little end to the quest.

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there's a bug on PS3 if your get the remains before getting the quest, you can't finish it (perhaps once dungeon resets...) but you can do as you said and light the lighthouse, but the quest still says find the reason for the murders at the lighthouse... at least I don't have to carry around the remains forever. – Chuck Savage Jul 15 '12 at 1:45

This video shows the exact location and how to get to it:

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