It's working for me; check that you don't have anything else that it's loading below that puts a new landmass to the north-ish of Solitude that might cause a conflict.
I play this on the Xbox and I had that problem too, but I saved the game in front of Steward, and loaded the game again and he started talking about the challenge when I went to talk to him.
It looks like it has been withdrawn. My game crashed, and when I reloaded there was no more children's room. I'm here today looking for a missing mod, but I don't see any mention of the children's room now. Unfortunately, it doesn't look like monstorsock1 is supporting this mod anymore.
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