i think you are reffering to that legendary katana near the tower of garth brightwood tower - after you recruited the hero of skill in wraithmarsh you have to return to garths old tower(brightwood tower). there is a place where the magical gate is that teleports you to the near of the town reaver is in ( a place you've come along when you came to the tower the first time . you jumo from a hole in the rialing into a broken tower you follow the path and if you go out of the cave there should be a treasure chest with the daichi ( RIGHT NAME IS DAICHI NOT DIACHI) long text short message : here is a youtube video how to find the daichi
