So what the hell do I do?

the Auril priestess will only appear after u had talk to the Undead Specter that is the babarian king.... if u want the location of the priest check out the spolier in IWD website it will tell u which cave to go.

Are you sure? Auril priestess only appears (in the cave located south-central of the vale of shade) after you talk to the Kresslach. Try to talk again with Kresslach and if he still request the death of the priestess, return to the cave.

yes i am sure only after u talk to Kresslach than the Auril priestess will appear
she is in the cave where there are many boxes with yeti guilding it. u can unlock the boxes and get the stuff inside. the priest won't be there unless u had got the quest from Kresslach to kill her

yeah you were right. Thanks

u are welcome