Two of these guys ambushed my level 16 druid, just inside the Paludal Caverns entrance. Fortunately they conned light blue, so I was able to take them out with little problem. One of them dropped bone chips (but I left the other on unlooted).
EXTREAMLY rare drop, I've hunted Shadeweavers silly killing everything out there and only the Bloodbulk has proven more annoying to find. I've killed hundreds perhaps thousands of these things on my main and my alts when they were hunting for xp and i only found 1 the whole time. Then need to seriously check that drop rate.