When you speak with Wynne, she tells you that the Dragon's Blood (she needs for a new item) can be found in the Small Orchard, a little west of the Lush Woodlands entrance. As many NPCs have discussed, the Small Orchard is filled with weak monsters, suitable for new adventurers to train. The Furyfawns there also pose little challenge, but avoid defeating both of them lest you risk running into an aggressive Furyhorn. Head for the northwest corner of the map, and obtain the Dragon's Blood from the Take spot.