From the docks, jump into the water and head eastwards, aiming for the ice tunnel that leads to the bulk of Everfrost. Head north through the ice tunnel, and when you exit, travel north just a little further, to -225, 5, -353 .
Go to Kylong Plains. The Spiritwood looks just like regular T8 wood nodes, but is named "a branch of spiritwood". A Gnomish Divining Rod is recommended to speed up the search. Finding the branch completes this part of the quest.