Inside the Molavar dungeon, southeastern Craglorn. South-southwest of Elinhir Wayshrine, west of Elinhir, there is Magical Anomaly north of the entrance.
Start at Elinhir Wayshrine and head southwest. When you reach the Magical Anomaly crystal, turn south and follow the path underneath three broken stone gateways leading to the dungeon entrance. The skyshard is on the platform to the right, just as you enter the dungeon, but you will have to circle all the way around to collect it.
The entrance viewed from afar.
Dungeon location on the world map.
Mob pack is guarding the way to the skyshard.
Shard location on the dungeon map.