The "an undead knight" in Castle Mistmoore is in the dungeon under the tomb in the cemetery at location -36.25, 366.15, -265.40. Here is the dialog I had:
You say, 'Hail, an undead knight '
an undead knight says, 'Leave this place or find yourself [bound to this land] as I am.'
You say, 'You are bound to this land?'
an undead knight says, 'I was torn to pieces for failure to complete a task for my master. I lost my life, my precious [shadowknight armor] and most of all, my [lower body]!'
You say, 'what happened to your lower body?'
an undead knight says, 'My lower body was taken from me, along with my hands. I was pieced together using portions of other failed champions. Now I can only [create darkforge armor] in the form of helms, breastplates, vambraces and bracers.'
You say, 'You create darkforge armor?'
an undead knight says, 'Darkforge helms require my decayed helm and visor as well as two Freeport militia helms. The breastplate requires the decayed breastplate, decayed mail and two enchanted platinum bars. Vambraces need both decayed vambraces and a Qeynos Guard kite shield. The bracers require both decayed bracers and a broken horn from a minotaur lord.'
You say, 'Tell me about your shadowknight armor.'
an undead knight says, 'My darkforge armor! It was taken into the land of lizards by the lizardmen crusaders! It is worthless decayed armor now! I cannot even wear it any more, but perhaps you can! Would you like me to [make you darkforge armor]?'
You say, 'make you darkforge armor'
an undead knight says, 'Darkforge helms require my decayed helm and visor as well as two Freeport militia helms. The breastplate requires the decayed breastplate, decayed mail and two enchanted platinum bars. Vambraces need both decayed vambraces and a Qeynos Guard kite shield. The bracers require both decayed bracers and a broken horn from a minotaur lord.'