i'm not 100% sure, but something VERY similar to this item dropped from the ursines that are beside the rock golems at the bridge on the first level. I did not get the item nor did i inquire about it, but it had a name VERY MUCH like this one and was a staff. i'm about 90% sure it was this staff.
hope that helps.
probably dropped from a ursine shaman or sorcerer since they seem to be more rare than the dwellers, but i dont know if the type of mob determines the drops in daoc.