I cannot seem to find this townstone anywhere, I must be doing something wrong. There is also about 4 chests that are magically locked. Does it have something to do with this?? Someone please help.
Your in the right area with the magic locked chests... In order to open them you need to kill the Dragon Queen that is right there. you can wake her up by opening the small chest at the tip of the "U" shaped walk way. Once you kill the Queen the chests will unlock and it should be in one of those.