CONTAINS SPOILERS

Once you free the Dung Eater from the Sewer Gaol of Leyendell, he'll leave a message for you at Roundtable Hold that says "I'll defile you next. Come to the outer moat." This location refers to outside of the gates of Leyendell, Royal Capital. To the west of the Capital Rampart site of grace is a small body of water (see image) where Dung Eater will invade you and battle ensues.