The drop from the Malar druid in the Bandit keep west of Rauvinwatch keep.After dealing with the Malarites,the desk won't give the item drop to finnish the quest.Don't know if the server has to reset to do this or not.

If I remember correctly the Item is found in a chest within the keep.

Yep, it's in a chest one room away from the "portal" room, just look a bit closer

Thanks,its been awhile,since I had to do the quest.