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Background
Three times during your travels, you'll come across a reference to a scary story involving riches and a creature called the Unbound. Here's where you'll find the references:
Each reference will give you or update the Quest-Related codex entry for
Unbound, and then once you've gathered all three, you'll trigger the quest.
Walkthrough
Putting the pieces of the story together, you'll realize that they're coming from somebody named Vilhm Madon located somewhere in Denerim. You'll find Madon inside the quaint hovel in Denerim's
Dirty Back Alley.
When you enter the hovel, Madon will transform into Gaxkang the Unbound, and he'll attack you. Gaxkang can be tough to defeat. He'll hex everybody near him, reducing their effectiveness in battle, and he'll resist most spells. We didn't have any luck trying to prevent Gaxkang from casting (even
Andraste's Arrows didn't work), and so the next best thing is to neutralize his spells. Alistair can do this with his Cleanse Area talent, and mages can do it with the Spell Shield line of Spirit Magic. If you can regularly remove the hexes that Gaxkang puts on you, then you should be able to defeat him without too much trouble. But if your entire party stays hexed, then he'll probably heal himself faster than you can damage him, and you won't get anywhere.
For defeating Gaxkang, you'll earn about 200 xp, and you'll find some nice loot. Gaxkang will always drop a
Keening Blade, but with it he'll either drop a
Fade Wall or about five sovereigns (with the gold being much more likely). You can also loot the chest in hovel's bedroom for an
Elementalist's Grasp, a couple of gems, and about 10 sovereigns.