When I pick up the second piece of the rod it is deleted from my inventory. Not only is the rod not present, but the first piece of it disappears as well. Am I missing something? Any comments/suggestions? Thanks.

That's a bug. Plain and simple. When you get the two halves together, it makes a whole, which should immediately be put into one of your quick slots. IF it's not in your inventory, install the latest patch for BG2.

EDIT: Whoo hoo!! 200 posts! New gem! I rule!

Make sure you are checking your PC's inventory, not the one of the NPC which picks up the second piece. IIRC that's where the rod appears.

Try what Krazilek says and if this doesn't happen then go to Sorcerers place goodies (http://www.sorcerers.net/Games/BG2/index_editors3.htm) and download the patch to fix your problem.
Hope it will work out for you

Hayseed sez:

Thanks fellas. It's Thursday night, I'm eating some pork chops and I'm getting ready to go lay down about $60 for boobs in my face. I'm really cheap so I only get ice water to drink.

P.S. I emailed Interplay and got no response. You guys (and lady?) are really on top of things. Enjoy your weekend.