Faerie Talisman of Concealing Mists

Full Item Description
The Faerie talisman is an iron figurine, drawn up in an exquisitely lifelike representation of that miniscule winged humanoid referred to as the mist sprite. Perfectly polished, it glints in the sunlight like a sword's blade coated with the morning dew, at least beneath the most mundane of eyes
History
It is not recorded how the Shard left the Desert of Divine Despair, nor how it reached the banks of great river Meltundre, save that it must have fallen in, to work its way down the river-bed, and to hurtle over the Cliffs of Ten Thousand Clouds, in the torrential falls known as the River Sundered Skies. But it did, and in time, it washed into the banks there, beneath a great cloud of mist.
Now, in time, the Mist Sprite who called this place home found it, and disdainful of the presence of cold iron, she wrinkled up her nose and determined that it must go. And she gathered up her holy misty magics, and touching it, she sent them upon the Shard, intent on rusting it away to nothing. To her vast surprise, the skies erupted in thunder, the ground exploded with lightning, as HER attention was drawn. And the thunder blazed as the lightning boomed, and HER voice was upon the sprite. 'LITTLE ONE(One)one! YOU DARE(Dare)dare ASSAULT ME(Me)me!!'
Hide! Hide! The sprite must hide! But as the storm crashed down the waterfall from the skies, a raging sheet of fury, there was only one place to go. Into that cold, iron prison, she leapt, uncogniziant of what it was! Divine power fused to divine power, the faerie reduced to madness in an instant, though the Shard adapted readily to its new form, to the need to hide. And together, the descendant sheet of chaos from above washed over them, and they were unharmed, though she was still quite enraged with herself, for being foolish enough to attempt to attack a source of her power. But she must hide from her!
Locked into this loop of madness, the sprite's awareness of the rest of reality slowly faded, until a firm hand plucked her from the water...
Magic/Cursed Properties
The Talisman of Concealing Mists is a constant source of a powerful concealing magic, yet against mundane eyes, it does nothing. To the arcane eye, however, the area around the Talisman is difficult to penetrate, astral sight and clairvoyances both fogged by a curtain of mists, irritating and easily enough to conceal all but shadows, and perversely, the more powerful the vision that looks upon it, the less it sees. Even the divine eyes of the lesser gods are blocked, and these paragons can discern only a solid wall of fog and mist. Only the most mortal of men and the most powerful of the gods can pierce the veil and perceive that which lays beneath.
Yet, this boon is not without its cost, for to carry the talisman is to bear exposure to the mad creature that forms it. Schitzophrenic and paranoid in the extreme, this creature will gladly 'share' its madness with it's bearer. Soon, he is overtaken by the paranoia, seeking to hide from voices and eyes that only he can see, and in the end, he is filled with an overwhelming terror of himself, and he will be driven to flee from himself. This, of course, being impossible, will only drive him further into the attempts to escape.