When you reach level 10 in your character's development, you'll receive a message from Medora, asking you to go see Gortwog in Orsinium to get the Dust of Restful Death.

Gortwog will send you to a random dungeon on the Island of Balfiera where you can find the Dust. You'll need to kill a mummy and search the body, the Dust will simply be called "Lich Dust" at this time, and there are no clues to tell you that you've located this necessary item. Take the Dust to Medora in Direnni Tower.

Medora will tell you she needs to enchant the Dust, and to return in one month's time. When you return, the dust will be ready to use on King Lysandus' corpse, located in his tomb in Menevia. You learned of the location earlier in the game, either by delivering the cursed robe that Elysanna gave you and searching the body of one of the assassins which attack you after you've delivered the robe or by completing the quest described in "The Ancient Watcher".

The Dust will not put King Lysandus' spirit to rest but will quiet it long enough for you to talk with him and discover the reason for his unrest.