The Undead Paladin can be found in the hole level of the Temple of Hyath. He is in possession of a magical greatsword.

Spoiler: The undead paladin appears when his corpse is disturbed. According to the Paladin's Diary, he was a member of a party who was hunting down Hyath cult members, but became separated from his party when he fell through the hole into the lower level of the temple.
Community content is available under CC-BY-SA unless otherwise noted.