Read the archivist's journal found at the archive on the northeast of the Bloodmoon Island to learn the name of the ancestor tree.

Entrance to the archive.

At the ruins on the west side of the island (where you encounter some demonic enemies.), Cast Spirit Vision to see a spirit of Druid. It asks you to ease the pain of the ancestor tree.

The tree is at the center of Bloodmoon Island, but to reach there, you need to defeat Blackring members first.

In order to speak to the tree, cast Spirit Vision, then use the name to ease its pain. (You may need to kill the demons as well, they are the targets of Lohse's personal quest and A Hunter of Wicked Things)

The tree then asks you to kill the doctor possessed by the demon. (Doctor's Orders)

After you free the ancestor free, talk to the spirit of druid to complete the quest. (Located at x=193 y=417.)

The druid may reveal the location of his secret stash on the island. You must have 18 wits in order to find it.