Using 0.99.cvs.20070319, as distributed by Ubuntu
The Regenerator, and possibly other "Other"
items, don't get returned into the inventory
pool when a character Leaves the party.
Instead, they stay with that character, and
so are in effect "out of play". You have to
go back to the Manor, reactive the character
who has the item, and the character you
want to give the item to, and manually
transfer the item.
Confirmed that this bug is also present on kq-linuxbin-20080202 version, downloaded from this Sourceforge repository. It occurs with the Regenerator at least - I did not test any other "Other" items.