So, Cinco finally spilled it -- lvl 50 Vyxnaar is in the 5th lvl of the shadow caves and his helm is the rarest item in the game.

We just found him -- it's the Shadow Demon and he has a mana shield that does not seem to go down. Took a crazy long time to to kill him. We had no bird, though. We were using the mines to try and take down his shield. It never went down, but we did chip away at him slowly.
Then he dropped a bunch of whites and oranges. I didn't look at what I got, and the only whites in my bag were lvl 25 and I had one orange gemstone dagger. So he either dropped lvl 25 junk or sewer junk.

Anyway, would like to see if anyone else has better luck with him. There is no way you can farm this guy the same way as the original vyx -- maybe when we're lvl 75?