I myself went there to camp the Smoldering Shadow, and with another person we sat there for well over and hour without a spawn. We were...bummed out and thought everyone had beene lieing to us. Anyways, after an hour and ahalf of standing in the same place I ran around the area (yea, the whole area past the petrified hecklers) and I bumped into tons of Smoldering Shadows. So many infact, that we both go our Smoldering Hair very quickly. Within 10 minutes.
Anyways just wanted to post because while I was camping hopelessly in the same spot (like before) several people came by and asked if I was camping, said they were too, then left with a goodluck and a frown 8(. Figured I would drop everyone a line regarding this quest. Just run around the whole area and you will find plenty of Shadows. 8)