The Altar is just north of the Door that leads to the courtyard. Follow the hallway north and you will find a lever at the end near an altar. You can find this one the Prison Floor of Fort Joy, the area with the silent Monks. You cannot do this until you go into Fort Joy. Go to the bottom and pull the spear out of Withermoore and he will give you this quest, you also get his Spear which is a strong early game weapon. You need to dig in the hole that he reveals so you need a shovel or the Red Prince/Lizard to get in. He is up the ramp on the east part of the cave, walk up and he will chat with you. Find him the first time and then the second time he will go invisible.
Inside the cave there are two kids playing hide and seek, talk to Mody and offer to play hide and seek with him. Withermoores Soul Jar – You can find this in the cave where you went to find the Elf for The Shakedown quest. Talk to Elodi inside and she will thank you for your help. After you deal with the thugs, go to the south of the town and enter the cave there. You can talk them down or you can choose to fight them for bonus EXP and loot. There are two thugs talking to an elf near the entrance and you can intervene. The Shakedown – You can find this right when you get into Fort Joy.