In Iona's dungeon, you can just dump loot into barrels, and flag the locations on your map to return for when you have the teleporter stones back.
As Arhu the cat told you, Zandalor is in the castle treasure room, which can be reached from the Rivertown sewers. If you have already cleared the sewers, you should have found the entrance, which before getting the quest had a locked door you could not get past. If you joined the thieves' guild in Verdistis and have access to the sewer entrance in the poor section, that is the closest entrance (it is just south east of there), otherwise take the Ars Magicana entrance and head south and a fair bit west.
Rivertown sewers screenshot map
