Im officially stumped on how to complete this quest. Normally, I'd walk into the tavern and make a trading deal with the smuggler there and kill them at the meeting spot...but the trouble is, my reputation just recently became "Hero" and the smugglers won't even think about making a deal with me. So now my usual method of dealing with this quest has been cut off. I tried talking to all the merchant/store owners, civilians, and tavern owner. I checked every house in the town and even searched the entire jungle and cave outside of town. I jumped in my ship and, in 3D, intercepted every ship near the island and talked to the captains, then sailed to each shore (where the smugglers usually meet) and checked to see if they might be there at night. I cannot think of any way to complete this quest in the one day time limit the governor gives me, aside from talking to the smuggler in the tavern. I checked the forums and didn't see anyone else with this problem, so if no one is able to provide a solution I suppose I can deal with a pissed off governor 
