You must wait for all 3 Leeches to vanish or else you'll just get a message of "You see nothing out of the ordinary." Once their corpses vanish, you get the coral checking the ???.
I did not find this to be an issue, I checked it when there was still one leech dead on the ground and got the item.
I did find it to be an issue. I couldn't get key item until last leech corpse vanished. Possibly related to it having been killed by a party member without my having touched it.
If more than 1 member of the party needs to complete this portion of the quest, only one person needs to pop the 3 leeches. After the last leech fades away have a different party member who needs the item click the ???, then have the player who spawned the leeches click it afterwards. Otherwise the player who did not spawn the leeches will be unable to obtain the Strangely Shaped Coral (key item).
It is not necessary to kill all three, as you can kill off one if you manage to not aggro/link the other two and they de-pop.
Return the coral to Ensetsu who will ask you to take it to Norg.
Return the dagger to Ensetsu and watch a cutscene to finish the quest.
Notes
The Korroloka Leeches will immediately attack the player who examines the ???. If this player is low level, he may die from this. It is a good idea to have that player use Sneak (item/spell/ability) to prevent this, or have another player use an AOE attack to quickly attract their attention.
[Confirmed 2009-10-20] At least one leech must be killed. Popping the leeches and then letting them de-pop on their own will not allow you to get the key item.
Can be beaten by a full party of level 35+, and by many jobs solo at 50+.