My first rare item experience was when i reached yak's bend. Right outside the door i killed something that dropped a hammer of giant slaying. I was in awe. =)
Oh, and I have no clue where I got mine. I'm just disappointed in the gold drops. I expected more but most of the time its easier to find a good blue weapon than the gold of the same type that you just got. For classic RPG players, the items just aren't godly enough. However I know this is the point of the game. To keep it balanced and challenging. But theres always the wish that you had a weapon that could destroy anything in the game.
I got mine right ousaide Yaks Bend also. It was a beastmaster harness and had a major rune of vigor in it, but when i used my expert salvage on it, i got some crafting materials What a way to waste my first gold drop!