I may have missed something but I found the key and loot in the river by the bridge. I went to the house near the mill and into the basement where the loot was and the glowing red stuff. A message appeared that the quest was finished but it's still in my quest log. It just states I should, "Read the document you found."

Is there a part to this quest I am missing or is this a bug?

I think I had two treasure hunting quests finish when I looted that room. Maybe you finished one of the quests, but were in the wrong stage for the other quest.