Adventure mode (questions, solutions, hints, etc.)

[Xanthaz]

I have had The Headless Skeleton quest for a long while now. The quest description is pretty vague:

"Find a head in the underground."

Seems like I have cleared all the dungeons up to the Dwarven Castle without luck. Did I miss it along the way or is it further in. Heck, I am not even sure what continent the "underground" is in since most continents have caves labeled as such. Any help?

Thanks.