I answered a lot of the riddle quests in this topic:
http://www.gamefaqs.com/boards/924363-the-elder-scrolls-iv-oblivion/51681362
Towards the end I posted this picture to show exactly where all the hints are leading you:
http://img.photobucket.com/albums/v189/phoenix7/Oblivion/map.jpg
Spoiler basically it's in the water east of the island there
Also the http://www.gamesas.com/topic/1234537-relz-integration-the-stranded-light-the-stranded-light-integrated-with-no-requirementsno-gameplay-changes/