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The Lady's Rest is an island located off the south-east coast in Frostback Basin.
The island is home to many spirits which the Avvar avoid. However, Professor Kenric believes this island holds clues to the last resting place of Inquisitor Ameridan. The Inquisitor learns that Telana, Inquisitor Ameridan's lover, traveled there to Dream in order to search for Ameridan after he disappeared. She never left the island, and a spirit which she attracted waits there to be discovered.
In order to get to the island, the Inquisitor must use the boat belonging to the fisherman, Arvid Rolfsen. He will inform you that the island belongs to the Lady of the Skies and that the Avvar avoid it. He says he can only allow the use of the boat as long as the Inquisitor gets permission from Thane Svarah Sun-Hair. Head to Stone-Bear Hold and speak to Svarah Sun-Hair. She will grant you Guest status, which grants use of the boat.
In the tent near the dock, there is a chest and a letter.
Letter Found near Many Corpses
The Barbarians are afraid to go to this island. I can see why, with all the spirits, but it's completely safe. I was out there myself for a good half hour, and the spirits never bothered me.
Steal one of the Avvar boats and set up a camp. This route will bypass all the taxes, and with Avvar and spirits all around, nobody in their right mnd will track us here.
I know how you feel about demons, but trust me. This is completely safe. Peaceful, even. All you have to do is relax on that island and wait for goods to come your way.
It's completely safe.
As you explore The Lady's Rest you can hear Telana speaking what one can assume are her last words.
This blood... my blood? No, I can't... Ameridan... Ameridan, why?
I can't... not without...
Vhenan... I'm... dreaming...
Sleep. I need to... I must find you...No, no, no.