Cold Steel

You can loot [item=118653] after you have killed (and while fighting) the second boss Nitrogg Thundertower, it will be next to the cannon he used in phase 2.
And as Pinochet point out, as you change area in this dungeon, you will not be able to get to the item, if you have killed last boss Skylord Tovra.

Is anyone else as depressed by this quest as I am? I was so excited when I saw Keeshan in my inn and even more so when I saw the quest reward: the bandanna I still recall coveting at level 15. But the description got me right in the feels. This man who has been through so much: near endless war, the loss of his wife, the destruction of his entire Bravo Company, has finally given up for good. Last time our objective was to cheer him up. Now it seems like we are just encouraging his apathetic self-pity, handing him his meager tool of destruction as he hands over his characterizing bandanna saying, "Here, kid, you're gonna need this more than I am." I want a redemption story. I want my John J. Keeshan back, not this sorrowful man drowning in his ale and the blood of his unworthy opponents.

Was wondering, where on earth is Keeshan, can't find him to hand in the quest. Then i remembered that the level 2 tavern has a basement(entry next to bartable).

There he was, just staring at a wall.