Awesome Diablo II double reference right there. This dropped off Rakkinishu, a boss Rakk in Rust Commons West. Wait, make that three references - to me, the item's about as useless as the one it references.
 
Since I'm using the German version though, I'd have expected a "Schärpe im rissigen Zustand", which is the literal and completely hilarious translation. Instead, they went for a partial translation. Oh well.