This is one of the four horde-side quests that leads into the quest line for the Water Totem, and therein the ability to use totems of the water class.

She is currently located at the following Coords:

65,43 - Just head south of rachet, she is near a fishing hut around the previous coords on the largest collection of land.

http://www.youtube.com/watch?v=onw2TSULwso How to find Islen video.

It took me a long time to find Islen Waterseer as I was looking along the Gold Road south of Crossroads and ended up in Thousand Needles. She is on the coast in a hut on the beach and is not inland at all.

I finally went to Rachet then south following the coastline. If you stay on the beach or very near the beach and waterline you will run into her hut. She is in the same area as the pirates who are also south of Rachet and for which there are several quests in Rachet.

The distance to Islen Waterseer from Rachet is not far and you should not even make it as far as the pirate ship anchored in the bay. Just stay on the beach and climb the hills along the beach, steering clear of the pirates. Unless of course you are wanting a fight! <grin>

Given how simple the Alliance-side Call of Water (And Call of Everything Else, for that matter) quests are, I'm baffled as to why Blizz hasn't bothered to give the Horde side an update. Alliance have the pleasure of doing all their errands within a fairly limited area, whereas the Horde are forced to run all over creation to get their Water Totem. Come on, Blizz. Pay attention to your low level experience every once and a while. :/