The Endless Watcher is a specter, which has stood watch over the trapped lich Zhadroth in Kanaglym for centuries, and will only appear if the lich is released.
It will be greatly angered over the freed lich and attack, the battle ends by Zhadroth trapping the Watcher with a spell, leaving the Astral Crossbow on the ground. The fight can be avoided if told Zhadroth is destroyed, then it will reward the same crossbow, and be released from the endless watch.