Found the dig spot on line! Picture attachedAdded (2011-10-24, 1:34 Am)
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I have the directions to find Lady Gray in the Forgotten Isle Haunted House!
Go to the maps section of this site and find the haunted house. When you enter you will be in room #1. Take the door to room #2, than room #5, than room #6, than room #12. In room 12 take the north door and it will take you to a different room where Lady Gray is.
Hope this helps!