The ILRs in Rivendell, Lothlorien and the Druedan Forest Tents do not work. They seem to be unable to realise that you have put an item in the chest.
Tree, is it feasable to incorporate the ILR into the smiths? The opening conversation options could be something like this (assuming there's an item on the anvil):
1. I want to modify the item on the anvil.
2. Could you tell me the current level requirement of the item on the anvil?
3. Nevermind.
This will save a little bit of space, (don't need so many NPCs standing around) and mean the players don't have to go looking for the (rare) ILRs when they want one.