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Reagent Storage Chest
I know of 2 creatures that drop Nutcracker Wand. There could be more, I don't have the scoop on ALL the bosses out there yet. I been trying to get Scarlet to do my work for me - uh, I mean HELP me, but I haven't had much luck yet.

NameLocation
Jade OniJade Palace, MooShu
Lord Nightshade Haunted Cave, Wizard City