The Imp's Lair, where you can find Arthur Gremory, is just across the water east of the teleporter to Stone's flying fortress. Look for the ledge first; you need to be fairly close to see the hut and almost right up to the ledge for the hatch (I actually didn't notice the hatch flying up to the ledge the first time, until after I transformed to human to check the ledge out).
Here is a
map of the fjords.
