After several failed attempts I finally got my magic bunny hat.
I was on the verge of giving up several times before he spawned, so hang in there.
I followed Aegishopi's advice and carpet bombed everything around Tain Hammerfrost for about two hours & a half hours.
It's pretty tedious work, but a Dusty Soriz Worker Pouch & a fast mount made things alot easier.
Good Luck!