quest asked to go to vahlara to deliver the silk but could not find it in my full inventory (i key) where else would I find it?
If your inventory is full and backpacks are full (right-click them as mentioned to see the contents), then you need to either sell the stuff you don't want to keep. There's a merchant right next to the banker, as well as spell merchants across the bridge. Right-click a merchant, then select an item from inventory or bag slot and press the sell button. Or, bank the stuff; right-click on the banker to see bank slots. While in there, grab the backpack out of the bank and place it in an empty inventory slot, to increase your personal storage space. Once you've checked your bag(s) for them and cleared some room, you can hunt spiders and lurkers to loot some, if you don't have any. Like Guado says, let us know if you figured it out or not. Yther Ore.
Did you collect the right silk in the first place? It's not the silk from the dead spiders but the stuff you get from killing the spiders nests. You can tell the difference because the quest silk is no drop. Cluttered bags can be cleared by selling your junk to the merchant. The game puts stuff in the first empty bag slot you have so before you go questing move your junk to your bottom or last bags so all the quest stuff goes on top.
You are thinking of Gloomingdeep Cocoon Silk, which comes from the cocoons in the spider caves, which is for the Spider Caves quest from Guard Vyrinn. The hand in to Vahlara is Gloomingdeep Silk, which drops from the spiders and lurkers (but not spiderlings). Allakhazam (unusually) is a little unclear on this.
Yeah, I guess I had mistaken glomingdeep cocoon silk with gloomingdeep spider silk. Sorry for the trouble.
The quest you mentioned IS the Gloomingdeep Coccoon Silks. The Gloomingdeep Silks are turned into Vahlara to get Stiched Burlap gear (Random reward, but you can get most of your slots outfitted).