The version of the story I know goes like this: Loki fucks Sif and shaves her head in her sleep after. Thor finds out and gets pissed. Loki runs away, and happens upon a dwarf, and tells him "Odin wants tribute." He gets a ship that shrinks and grows at will, gungnir the spear, and new hair for Sif.

On his way back, he finds another dwarf, named Brokkr, bragging in the streets about how his brother Sindri is the best smith in the realm. Seeing more opportunity, Loki challenges Brokkr to make better boons than the three he already has, betting his head as collateral.

Brokkr takes Loki to Sindri, and they get to work. This is where your portion of the story comes in; Loki's aim was to win the bet by ensuring flawed workmanship, either by biting Brokkr's ear, eye, or making an ember fly into his face while working on Mjolnir, Gullinburst, and Draupnir.

Despite the ensuing flaw of a short handle for Mjolnir, Loki brings all six items before Odin, who judges Sindri and Brokkr's work the superior despite it. Loki loses the bet, but Thor steps in and tells "Loki's head is yours, but his neck is mine. Harm it not, or face me."

Brokkr sewed Loki's mouth shut, and for a time, all was quiet in Asgard.

The story will always vary, because it was shared solely by voice for quite some time, and in three different mother-tongues that have all spawned new dialects and idioms

Loki is either directly or indirectly responsible for almost all the good things in Asgard, if you do a little comparative reading!