Hey, just had a run of Shadow King at-level, and we fell 1 torch short of being able to complete. All torches were extinguished - we checked the entire area, twice. (Including the middle torch, and the one near the entrance.)
Later, a guildy went through the quest and had the same problem. 1 torch short of completion.
We think it might be due to the same glitch that's effecting recall. If you're interrupted while extinguishing a torch, it will immediately light the torch. However, it will not update your quest log, so you will not be able to complete.
So if you're doing this quest, make sure EVERYTHING around you is dead, and do not interrupt yourself when extinguishing the flames.