Last time I had one of these in my hands, they were No Drop. Paladins spawn
in front of Guk (slowly) and drop these often when they die. If you don't
mind the faction hits from good towns and have some friends who don't mind
them either (trolls, ogres, and DE non enchanters are great for this), you
can pull the paladins in the Rathe Mountains (enter from Ferroott, turn
right, on mesa) that are now used for the paladin armor quests. Very hard to
pull only one and they vary in level alot (from around 10 to over 20).
Memory blur can be quite effective to pull only the ones you want. Good loot
and experience if you don't mind never being able to enter a 'good' town
again.

Lozi CT