I have read that he is located on the way up to the quest room, in the room with some bookcases and a couple of small jail cells with cubes in them (loc 760,920,217) but that's not where I found him. I found him next to Oglard (loc 475, 626, 323).
You say, 'Hail, Eldriaks Fe`Dhar' Eldriaks Fe`Dhar seems very intent on the books he's looking over. After a few moments, the wyvern mutters, '..............Hmmm?'
You say: "Hmmm... My scaley balls." He says: "Ahh... You have been chosen to rid the scales from my balls." You say: "What balls?" He says: "The balls that dangle from your chin." You say: "Why do they dangle from my chin?" He says: "Because you have a d**k in your mouth!"