This drops, logically enough, in the Tower of Solusek Ro, off the random rares that occasionally pop on the way to the 5 minibosses. I strongly believe that these mobs all share a universal loot table, consisting of this cloak, the Burnished Kite Shield, the Necklace of Flame Marked Links, and the Fine Ivory Beaded Veil ... but then again, it may be that all the rares and minis and junk filler mobs I've killed in that zone have just bled together. Certainly, this cloak (and the Shield) have been the most common of the tradeable loot drops in the zone for us.