Ok check this out!  The circle, is not in the water.  I spent about an hour looking around for a circle of rocks in the water, I mean the guy is a water elemental right???  Just south of the fence at the pirate stronghold is the valley, head due west of the foothill protruding into the water, thats right west to the hills!  You'll see the circle of rocks!  I mean how stupid is this??? I am a lvl 53 Warrior and I smoked this Aquementas and I still had 3/4 hp left.  I cant believe the directions on this one.  Sad assed!  Thatnks for some of you guys for at least pointing me somewhat in the right direction.  After reading everyones comments several times, I was able to piece this gem together!