Quests and Achievement Questions

[Sunlandic]

1) If you go on the island where you get the quest there's a place with some stones shaped like an arrow. Around there (not where the arrow points in my experience) an event will trigger and a mob will spawn which drops the quest item.

2) The cellar is in one of the ruined villages where you get the quest; a different village from where the axe is and where you get the quest. It has a faint glow, fairly easy to miss; there's another quest in there if you choose your dialogue right.