There are a number of ruined ships on the beach. If you're standing on the shoreline with your back to the water, the Captain's ship is the one at the back wall on the left side. He's deep inside. There are a couple mobs at the opening to the ship.
His placeholders can be a maniacal zombie or one of the skeleton type mobs.
Perhaps it's been a case of bad timing, but he doesn't seem to spawn as frequently as he did when LoY first came out.
As is common with named mobs, he's a bit tougher than the other skeletons on the beach.
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"God created man from a handful of dust, and he created woman from that man's rib. And these two together were so stupid that they weren't on the planet five minutes when they managed to get a curse put on all future generations. Nice work." Pat Condell
I got the cape off some backstabbing gnome in Gunthark, near the fort close to the entry to the caves. 10 cha on it, and I think 5 int. Replaced my mystic cloak, and now I can max int and cha if I'm in an illusion using my charm. One of the nicest back items for an enchanter, in my opinion.
Sea Captain Azobus is the full name of the MoB that drops the sleeves. I have killed him 3 times and all 3 times he droped the sleeves, sold the sleeves for 1000pp on Cazic-Thule.
Got these from the Captain. He spawned near the erudite spirit (N1100, N1000) inside the hull of the nearby ship. PH is on a 20 min timer Captain was there when i did pally spell hand in. Killed PH twice more but was a random mob
Sea Captain Azobus is a skeleton, so no, there is no faction hit. I haven't found any "havens" of "good" creatures anywhere in Gunthak. I also have never seen any faction change at all from any kill.
Yes, it drops from a "Captain" mob that spawns on the beach. Sorry, dont know its exact name or where it spawns. I dont think it has a faction hit, because I havent seen a single faction hit anywhere in the zone (and the things that would give a hit that you dont want to kill, you cant even attack).