I always liked Lofton - all the way through the show.
The Assignment is good, and is a brilliant example of why Keiko needed to be on the show for that Keiko thread that's floating around. Unfortunately for later-DS9, the Pah-Wraiths seem at their most formidable here. It's a shame that the writers never got a proper handle with them later on in the show - The Reckoning was dumb, and Dukat was sort of shoe-horned into their plot to keep him valid to the show; as character damaging as that was.
O'Brien is properly tortured here - as is tradition. Colm Meany and Rosalind Chao are very good in this episode.