Yes, you can keep your crystal pendant throughout this quest. When you receive it and use it for its purpose, the next time you talk to Lord Iorwerth the pendant is removed from your inventory. Even banking this item will not stop this from happening. So if you want to hold on to it you’ll need to drop the Crystal Pendant before you speak to Lord Iorwerth for the remainder of the quest. That being said, it isn’t all that useful as an item so if you do choose to keep hold of it, it will only really serve as a fun trinket. Still, better to have than not we suppose.