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From a hole in the midwestish of Pogan Island. You need three quests, Princess Vasilisa, For Mr. Tainnik, Hibarki Village, talk to the wizards on the Floating University. That boat is docked in Hibarki Village. Find out anything the wizards may know about the attack on their ship and the disappearance of Princess Vasilisa. Find the Princess and bring her to Mr. Tainnik for safety. It's believed she was whisked away by Kozney and his minions during the attack.
Kozney's Lair For Fershid, Floating University, find Kozney's Lair. His spies tell him the entrance is somewhere on Pogan Island.
and Kozney's Death For Old Shaman, Floating University, find a chest that holds part of Kozney's life force. It lies beneath a bush below Pogan Island in Kozney's Lair. See Fershid in the Floating University for help in finding Kozney's Lair.