Your problem could be the fact that you're supposed bring the staff to Kai, not Lui. Hope that helps you.

It's true, you are supposed to bring it to Kai, but really what is the deal with Liu saying, "I will talk to you later my friend."? I can't make him say anything else. (Unless I hit him) Then he just tells me how "skilled he is in the art of Kombat". I'm sure someone has an answer. (preferably not a smarta$$ answer, but I know I'm asking a lot from this forum.) -

I think this is put there by the programers to give you a hint that Liu will be playable later on in the game.

Ding ding ding ding........guess what kids its time for learning with Kano.......uh okay it's not but i do know the answer.
When you speak to Tanya in outworld she tells you to look for a cave suitable to ambush Liu Kang in if you find it she will pay you (it is located in the Tarkatan camp Nitara is in there) However instead of going back when you find it go and talk to Liu and he will thank you and give you some Koins. I put two and two together when i went back to speak to Tanya and she said "you have already been paid". Also now i have completed Konquest Liu is no longer in that spot.......strange. Now you can help me what the hell do Nitara and Reptile do........if anything that is as they just tell you to go away whenever you speak to them.

Shao Kahn's roaming Outworld and he tells you to fetch Reptile for him. After doing this I never saw Reptile again. I wanted to fight him!

Is that the only time that you encounter Reptile? I have completed konquest and did the reptile task. After that, he is gone.
However when I was fighting at the prison stage today I saw Reptile in his MK4 style behind bars. So maybe there is a way to meet him again later in konquest. Anyone who knows more about that?

well nitara u have to ask one of kahns preists and he will tell u to find proof of vampires IE nitara. and reptile u have to speak with shao kahn and he will tell u to find reptile

I wouldnt worry about him popping up in the prison level as the whole thing is just a gimmick with characters from all the MK games popping up behind bars........i think Ed just wanted to have a little fun with that level its nothing major. Oh and thanks for the tips guys.