Mírdiniel of the Malledhrim wishes you to search Dannenglor one last time -- this time for the most priceless remnants of the days when Elves lived there, before the merrevail took hold.
'These small treasures almost certainly came from a priceless Elven creation, a treasure beyond treasures, and a gift to the memory of the Elves who walked here once. Such a prize should not be left to be swallowed by filth and corruption.
'Once more, ${PLAYER}, I must encourage you to go on a quest for a relic of my ancient kindred. I do not think the acorn will have fallen far from the oak. I believe this greater treasure is still somewhere in Dannenglor, waiting to be reclaimed by those who will return it to its proper glory.
'Go to Dannenglor once again, if you dare. This treasure will surely not be unguarded, so go with care. You will have done a great deed for my kindred if you manage to return to me in triumph. Good fortune to you, mellon!'
The primary thief among the merrevail can be found in Dannenglor, north of the Haunted Inn in the Dourstocks.
You should confront the morroval who hoards the priceless Elf-treasure and attempt to reclaim it for the Elves.
Mírdiniel awaits you at the Haunted Inn in the Dourstocks, south of Dannenglor.
You should bring the priceless Elf-treasure to Mírdiniel so that she may send it to be kept by the Galadhrim in Lothlórien, where it will remain safe as long as the Elves exist to watch over it.