BUGGED!
Shame on you, Bethesda. Shame on you.
Feel free to Google "Shivering Isles Bug".
Unfortunately, something that makes this game/series great is user mods and the sheer number of items that can be manipulated. The bug kills this and is based on a problem that has been in the game since the beginning. I can't see how this got to the shelves, as there MUST have been play testing.