According to Kaye, it is "either east or west of Mt. Kand", which seems to cover half the world. I've been wandering about for weeks, with no success. Anyone help?

I don't know about Kaye and the Staff of Smashing, but I recall a quest that directed me to a cave in "the shadow of Mt. Kand" (that being either west of the mountain in the morning or east of the mountain in the evening.) It may have been the Staff of Magnus quest, I'm not sure. But.....
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The cave was southwest of the cave on the top of the mountain. It was fairly close (less than ~1500 ft?) I'd suggest getting a good levitate spell or item (at least 30 sec, better yet 60 sec) and methodically search the area south and west of the cave on the top of the mountain. If you have the PC version, open up your menus and resize the map and put it in the corner. If you click on the box on the right side of the map "menu/tool" bar it will stay put when you close your menus. That way you can see the area immediatly around your character and catch any doors that may be difficult to see due to light and/or ash storms. Good Luck.

Thank you!