Smoldering Ember Wyrm drops from Nightbane in the new dungeon Return to Karazhan. The drop rate is 100%, but it is personal loot and can be delivered to other players in the group.
The Nightbane is tied to a speedrun of the Karazhan mythic dungeon, and you need to active it in time. Once overtime, a new restart will spawn. After clicked on a buff "Medich's Echo", which lasts for 6 minutes. Each time you click on a new Soul crystal, it will add 5 minutes to the timer. Specific steps here: 
1. Kill the boss to run Opera and click the first Soul Crystal.
2. Clear the monster in front of Maiden of Virtue to get the second Crystal, no need to kill her before getting the crystal. 
3. Kill Moros downstair to get the third Crystal.
4. Go to the spider room at the bottom floor(on the right of the first floor in Karazhan) to get the fourth Crystal. Then go back the dungeon entrance by suicide.
5. Kill The Curator to get the last one.
6. Go to summoning Nightbane place and talk with Medivh to get the achievement "One Night in Karazhan". Then summon Nightbane, maybe Ilvl875 WOW gears and relics will drop.
Does it remind you of Amani Battle Bear with the similar process?
Hope this will help for you to get a Smoldering Ember Wyrm soon.