OK, I loaded an earlier game and succeeded in recruiting Sauzer. So here's the order in which I did things.
I met the vampires and took the diamond quest. Met Morte, got the kill Zeal quest. Went to the mines, got the diamond. Then went to Truth Temple and recruited Suazer. Talked to Zeal, then delivered the diamond to the vampires and accepted the quest to kill Morte. Killed Morte, talked to the vampires.
Now my question is, do I still need to kill the vampires? Or have I done everything in good enough order to get the happy ending without having to kill them?