I'd say there were 3 main areas you went wrong in that game:
1) You definitely underestimated Lookout. With that much junking coming in to your deck you definitely wanted more than one of them. Also with fortress on the board, using lookout more than usual is OK because if a fortress and some other engine pieces come up, you can freely trash the fortress and it goes into your hand, so the risk is lessened. Also also if you do get the Royal Blacksmith engine going, you can draw all of your cards and end with a load of coppers as the only cards in your deck, that your lookouts can then trash with no risk.
2) You got too distracted by Flag Bearer and Soothsayer. The extra card from the flag didn't matter because your deck was filled with junk so it made little difference. On this board you either wanted to go all in on Soothsayer or build the engine, and you sort of went half on both and as such had a deck that didn't really do anything. Note that in 4 player, one person can easily skip cursing and it's not so bad as in 2 player. In 2-player if one person skips junking they lose the curse split 10 - 0, but in 4 player, they tend to lose 7 - 7 - 7 - 10 or there abouts, which is nowhere nearly as bad.
3) You needed to focus more on Engineer to get the engine components you needed. You needed way more fortresses, patrons and lookouts in your deck so that the engine could be built in time, and the only realistic way of getting enough of these was with engineer. Lookout - Engineer would have been a good opener.