Go through tunnel that has that giant training golem in it and look for one tall boulder and one short boulder that has a walk space in between them and the quest will complete.
Coords for exact spot is X = 4429.76 Y = 5033.64
Just got this as a random drop from a Hobgoblin Char near the bind stone closest to spirit manor / small thronefast bridge beyond the crossroads. New stats are:
16 AC
+1 Dexterity
+1 Agility
Item is both Unique and Magic now.