A man walks into Corl's Bar, with a wiener dog under one arm and a two foot salami under the other...
So my point buy diplomat druid with negotiator feat for 6 diplomacy and 6 sense motive was unable to get corl to admit to anything (which seems harsh, having taken a whole feat for improved diplomatic options), I leveled up to 3 for 8 diplomacy and 7 sense motive and I still can't progress his dialogue anywhere. If you fail the conversation the first time is that the end of it and the quest is failed? Is there any other way to resolve this quest from here and if not shouldn't the journal entry shift to bungled?
I played around with it and apparently it's a gather information check (which doesn't make much sense based on the dialogue and situation), which if you miss the first time you talk to him, leaves you unable to progress the quest as far as I can tell. This is on top of the completely arbitrary talk to the same badger twice...
You are mistaken - as Blackwind stated, Corl never will confess to anything more than poisoning the sheep, all the way back to vanilla. Also, there are no gather information skill checks for Corl, though there are intimidate and sense motive skill checks. Regardless, neither of these will get Corl to confess to anything more than poisoning the sheep. If what you're referring to here specifically is an inability to get Corl to say anything beyond "I am not talking to you!" or "I will deny ever being there." when you approach him after exposing him as the guy who's poisoning the sheep, that is all he ever will say. There is nothing more, and no skill checks preventing access to anything else. The talk to the badger twice problem - and indeed the entire modded Corl/Black Jay thing - will be reverting back to vanilla in the next release, so further discussion of modded Corl is kind of pointless anyway.
Yeah sorry, I was always talking about admitting to poisoning the sheep. My 6 diplomacy/6 sense motive druid was unable to trigger the initial confession about the hemlock and having failed that initial conversation I was unable to progress his dialogue ever again. I whipped up a bard to test the encounter and the initial 'you aren't telling me everything' dialogue option was available but was represented by the ear symbol which I'm pretty sure is gather information? The sense motive (eye icon) dialogue option came after this gather information (ear icon) check. edit: just checked again. the dialogue is - "Are you sure about that? Tell me the truth boy." and it's a one chance gather information check.
Whoops, I was looking at the new (original) file, sorry. You're right, it's a gather information check, which seems appropriate to me since you're trying to get him to give you information: "Tell me the truth, boy." At any rate, it still has no effect on his confessing to anything beyond the sheep killing, and it's a one-off limited not by the skill check itself but by the fact that you can't get to the "I understand you were seen out on the north end of town during the night" dialog node but once. I won't bore you with my reasons for doing that; as I say, it's going back to vanilla anyway.