You will find Ygadr's spirit at #5 on the Longwatch Falls map. Speaking with the spirit requires the use of your Watcher abilities. The spirit will indicate that he was searching for his twin soul while he was still alive, but was brutally killed during the search.
You will find Ygadr's Journal at #8. You will likely have to fight through the Lagufaeth at #7 to reach it. The Journal itself speaks of a cave behind a waterfall.
The entrance to the Ice Cave will be at #17, which serves as the lair of the Alpine Dragon. There are two distinct possibilities.
You can indulge in extended conversation with it. Perception checks of 13 and 16, Intellect checks of 15 and 19, and a Lore check of 12, are possible during the conversation and can provide additional insights on the Dragon's condition. It becomes tired of the conversation at some point, when Aggressive and Rational replies become possible.
You may, after that point, try to convince the Dragon to let you use your Watcher abilities to sever its connection to its soul twins. First, you need to make either a Might check of 20, a Perception check of 16, or a Resolve check of 17. After that, a Perception check of 12 will only provoke the Dragon into attacking. The correct follow-up is a Resolve check of 17. When you sever the connection, the Dragon will reward you with Ryona's Vambraces and that will be the extent of your reward.
If you are going to fight the Dragon, keep in mind that it can be a very tough fight. The Dragon itself can obliterate multiple party members with its cold breath weapon, and has high damage resistance to pretty much everything. It will have complete immunity to cold and bludgeoning damage, but may be vulnerable to slashing damage. It will be helped out by several Ice Blights, Frost Oozes, Spectres and Wraiths.
As for the Dragon herself, there's a few approaches. One is to use the trick of equipping both a shield and another item that both provides +50 to all defenses on Prone or Stun on a character, casting Withdraw or Beetle Shell on that character, and then having the Cipher use Defensive Mindweb to put everyone's defenses through the roof.
Also, given its resistances, single-target attacks that inflict Raw damage are highly recommended. Examples include the Cipher's Detonation power, as well as the Wizard's Ninagauth's Killing Bolt.
Also, keep your characters spread out to avoid all of them getting caught by the Dragon's cold breath weapon.
It is of course adviseable to have your tanks on the Dragon from the word go, while other characters come in after the initial engagement, but keep in mind that the tanks themselves may be in real danger over the long haul. So it may be recommended to keep them stocked up on Potions of Major Endurance and the like.
Should you win, the Spectres and Wraiths will leave behind Spirit Residues while the Blights will leave behind Primal Waters. The Dragon itself will leave behind several pieces of Dragon Meat.
Lastly, if you have previously obtained all but the last of the upgrades for Ryona's Breastplate, then simply resting inside the cave by itself will suffice to complete the last upgrade.
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The entrance to the Ice Cave will be at #17, which serves as the lair of the Alpine Dragon. There are two distinct possibilities.
