<p>No, "seeing" is neither ambiguous nor in the wrong tense.</p>
<p>a) "He" would suffice to act as a subject pronoun whose referent is implied to be the original subject "Quincy." So, there is no ambiguity regarding the subject Quincy and the object Dan. However, a subject pronoun ("he") is needed to refer to the subject Quincy.</p>
<p>b) "Seeing" doesn't have a tense. It is a gerund referring to the action of seeing. The action's proposed tense is neutral. So, that the present tense should be changed to the past tense is not the issue here. It should be "before he would see Derek again," not "before he saw Derek again," because it would be consistent with "that five years would pass." "Would" is the past tense of "will," so it is in turn consistent with "Quincy took Dan" home. The whole sentence is in the past tense. Think of "would" as "was going to." This makes sense because it is the past tense of "will," which basically means "(am) going to" ("I am going to..." = "I will...").</p>
<p>Original corrected sentence:
Quincy took Dan to Derek's home for a visit, never imagining that five years would pass before he would see Derek again.
Modified, simplified sentence:
Quincy took Dan to Derek's home for a visit, never imagining that five years were going to pass before he was going to see Derek again.
Obviously, at this point in the past the five years hadn't passed yet, and, in turn, Quincy hadn't seen Derek again yet. So you, thinking about this particular point in the past, say that the five years were going to pass, and Quincy was going to see Derek, but not yet. . . . Kind of like in the future tense in the past.</p>