Exact location of the brazier is (68, 7). It's pretty noticeable on the main map.
As Teer said, Sangrias Stillblade (Lv.12 Humanoid) attacks you after you light the brazier. He hits reasonably hard, about 20-25 on mail with a two-hander, so make sure to start healing early if you feel you need to do so. Kill him, and return to Knight-Lord Bloodvalor afterwards to get the next part of the chain.
You may want to pick up and complete Anok'suten from the Dying Blood Elf at (57,14.) While she's a Lv.11 Elite Undead, he isn't too hard by herself, especially if you've picked up a few greens from the auction house. However, she calls for help at around 40%, so do be careful to pull her well away from other nerubians. She can be found roaming the circlular road surrounding the tree in the center of the town.
It's also advisable to complete Suncrown Village as well, since it's along the way and you'll likely be returning to Tranquillien in order to fly back to Silvermoon City.