The stone rose is in the part of the dungeon thats behind the "gates of doom" (err something like that) Its where the ice boss with trolls around is. I have attached a link for their wiki if Ki lets me:
I know the post thing says out of date but i would imagine its close enough. Anyway on the picture in the link, on the bottom right hand corner you see the picture of the tower, when you are actually there and facing the tower i think the stone rose is in a giant rock chunk on the right side behind the building a bit. (if the map picture is different, just line up the entrances of the maps) Good luck finding it and sorry if i confused you :-)
Thanks for all the info, but I still can't locate the Stone Rose. I went to every dragon skeleton, rock outcropping behind buildings. I even opened the gate of despair (not that I needed it). Anything else you can think of to locate the Stone Rose, would be helpful. Again, thank you.