The Isle of Mists - Multiple Locations
This quest is automatically started after you complete The Ugly Baby Story Quest/Va Fail, Elaine. In addition to this quest being added to your log you'll also receive other story quests which are required to be completed first. These quests include...
For each of these quests you'll have to go to that area and speak to people who have been involved in the major story plot side quests (like Zoltan, Triss, Keira). If you haven't completed their quest chains this will be your last opportunity to do so. Completing the Isle of Mists quest will fail all of their quest chains. Follow the links above to each of the Brothers In Arms pages to learn more about the quests and people involved in each.
Brothers In Arms: Nilfgaard is a single, short conversation to complete - you can do that in whatever order you want. The Velen version will typically auto complete for most people (assuming you did the Keira quest chain) and lack a Witcher 2 Save File.
When you're ready to proceed with the story you'll want to get on any boat in Skellige (pictured above) and sail far to the west on the southwestern most island (the same one you did The Lord of Undvik quest on). A tip, you can fast travel to any green anchor point on the map when you're in a boat. There is a harbor just a tad bit east of where our quest marker is (pictured below); I recommend fast traveling here to save time.
Once you arrive at the Isle of Mists the game will prompt you to save as well as warn you about the fact that many side quests will fail at this point. Take its advice and save in a different file if you haven't already - just incase. Then proceed.
You'll arrive in what appears to be a ship graveyard of sorts, Geralt will release the firefly that the mage gave him and you'll have to follow it through this ship graveyard (pictured above). It'll lead you to an island with a small cottage ontop of it. You will have to agree to help find three of the dwarf's friends before he will help you.
A map of all three dwarf locations is below - they're displayed on your map as well. Only one of the dwarfs will prove difficult, Gaspard. You'll have to escort him back to the hut in the center of the island and wake him up occasionally along the way.
Once you've located all three dwarfs and returned Gaspar to the hut you'll be able to get inside and see Ciri. There will be a lot of dialogue with Ciri and a few scenes after which this quest will complete. You'll automatically receive the followup quest, The Battle of Kaer Morhen added to your log.