Like all things in Oblivion, its randomly generated in loot.
Though you would want to look in: (taken from UESP)
In Grummite Dungeons
- Boss-type Hollowed Stumps, Chests, and Urns: 1 guaranteed Madness ore, %40 of another, and of this as the player is on level 1-8, there is a 14.3% chance to find a matrix, and after level 9, there is a 25% chance.
- Standard Hollowed Stumps, Chests, and Urns: 25% chance for Madness ore/Madness Matrix
In Zealot Dungeons
- Boss-type Hollowed Stumps, Chests, and Urns: 1 guaranteed Madness, 10% chance for an Madness Matrix