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This is NOT a drop from a Wretched. You have to open a crate with a stream of glowing blue light coming out the top. These crates/boxes are found around the male elven archer statue. Then the gazebo next to that statue. You can see the statue from Dawning Lane (the path-n-bridge you cross over as you walk through The Ruins Of Silvermoon). If someone else has the quest they might pick up your crates before you. Don't worry, the crates respon in about a minute or two.

Pictures to help: Quest Starter Crate Elf Statue More Crates Gazebo

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