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Well the vague-ish hint is already good enough i think. It says it`s under water. What's the only place that you know that is actually under water?
You can re-enter nautica even after it is "destroyed" once oyu fight the sea monster. Then just ask the queen to turn you into a fish. The stone is on a high ledge south of the general shop. You should see it when swiming just above the town coming from the queen palace.