The first step is to blind the Lich King. He's using a device known as The Ocular to watch the area, which floats above the vault's spires.
Our dwarves have created something for you to use against it. After the 'eye' has been destroyed, find Baron Sliver on the vault grounds. He's pretending to still be under the Lich King's will.
The Ocular still stands! Thassarian was a fool to trust you.
Whoever you are, don't return again until it is destroyed. My position here must not be compromised.
Perhaps now we can really get something done. Don't be fooled though, the Lich King can still 'see' through his Scourge minions.
That's why you're here.
The Ocular is situated above the spires of the Shadow Vault at [44.3, 21.5]
Sometimes the quest is bugged, and killing The Ocular will give no credit for it. In this case, wait for The Ocular to respawn, bring it down to 10% hp, then do the last shot really close to it (you'll get hit, but not for long) - this should get you quest credit.
The blaster used to have a range of 80 yards, changed to 95, and the ocular's aggro radius is 95. It will take 10 shots of the blaster to kill it.
Baron Sliver is just to the south of the vault at [44.1, 24.7] on the ground.
The name of the quest comes from the expression "It's all fun and games until someone loses an eye.". This expression was also a quote of C'thun.