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Turns out I was misspelling the item name. Once I figured that out the item spawned just fine.

I'm about to talk to Lady Aribeth after grabbing all 4 of the Waterdhavian creatures. I want to finish off all the subquests before proceeding, and the only one that is left is Daelan's henchman quest. I checked all the chests on the ship in the docks that is supposed to hold it, but it's not there ...