It can be a pain in the neck to find, but spawns in different spots around the giant yew tree. It is called sap of Sosaria, and it looks basically like a potion bottle, a slightly different color green than poison. It is a pretty small item, so as already mentioned, Ctrl + Shift to bring up item handles, as you run around the area, is your friend.
There is a nice write up about the quests, with a screenie of the radar map
here.
-Skylark