lord676 said:
Buy drinks in Rivacheg. Barkeep should tell you to check Shapesite, (probably spelled that wrong), one of the two northeastern most villages. Talk to the village elder about your medal.
I assume that you have completed these steps.
From there, choose to walk around the village, it will be a fair distance away from the village, off to the right of where you spawn in. It will be the really big gray rock. On the other side of the rock will be a big ol' door, and I leave the rest to you.