The bluecapped mushrooms are ground spawn in the ring crater that surrounds the city. Work your way down the walls from either of the bridges that lead to the neighboring zones. It is easier to get down to the crater from the ends of the bridges nearest the zones, rather than the ends of the bridges that are closest to the city. If you are feline, you have safe-fall and will not sustain much damage. Its is funny watching other races stumble and fall coming down.