Tanoch is correct. However there is a common problem that is encountered when trying to find the priestess.
When you speak to Kresselack and he asks you to kill the Priestess you have three or four dialogue options. Most of them are 'No I won't do it' or 'I'll think about it.'
If you select any of these the priestess won't appear. You have to select the 'Yes I will do it' response, then the quest will be triggered and she will appear in the location Tanoch specified.
Good luck.
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Listen, strange ladies lying in ponds distributing swords is no basis for a system of government. Supreme executive power comes from a mandate from the masses, not some farcical aquatic ceremony.
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