Got it! You need to take a Stardust Herb to the Phantom Forest North portal area. Head straight up from there, which takes you down a slope. At the end of the slope is a giant, interactive tree that displays kickstarter supporters. If you drop an herb on the ground at the entrance, the weresheep runs out.
Then you can attack it if you wanna.
Perception potion is an eyeball + empty potion flask.
