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Reagent Storage Chest
I know of 3 creatures that drop Nutcracker. There could be more, I don't have the scoop on ALL the bosses out there yet. I been trying to get Ghost to do my work for me - uh, I mean HELP me, but I haven't had much luck yet.

NameWorld
Jade OniJade Palace, MooShu
Lord NightshadeHaunted Cave, Wizard City
PtolemosCelestia Base Camp, Celestia