For the first part of the quest, simply click on Sir Gnomeahad. He says:
"You've accommodated the King, but where is my audience supposed to sit? My adoring fans require stands made of the best stone."
If you already have 60 Stone Blocks in your Inventory, then the second part of the quest will be automatically completed when you get the quest. If not, then you should send Stone Blocks to your neighbours as Gifts, and you should receive some back when your friends return the favour.
Click on the Tournament Grounds for the third part of the quest. Hammering will take 6 Hours, and remove the 60 Stone Blocks from your Inventory.