Guys, the reason the drop rates are so rare I found out is you actually have to deal damage to the mob with the char that has the quest, otherwise you will not see the drop, I farmed 3 clears on my rogue and no drop, the second I touched one of the bonecasters with my sk, the item dropped, all 4 kills in a row. The courtyard is the only place, and outside the scrying pool through the doors above the entrance.
Hope this helps.
Also Zaela, just as a note: The quest NPC also states he needs 4 of the beads when you talk to him, you might want to update that as well since it now only requires 3.