I just picked up the medallion you need, I don't think it'd take long to get back to Kuldahar from Dragons Eye-should I run back to get it now, then come back to where I am?

The Avenger is in Kuldahar? Where exactly ???

I have the item as well but have moved on to ch. 6 and thought the avenger was there...duh...

-thanos

Look for Pilsbane thread on it, it's a lovely little spoiler. In short, go back to the cemetary and click on one of the graves in the bottom right corner.