The graveyard
One of the oldest graveyards in The City, it is located in Old Quarter next to Fort Ironwood. The graveyard is also the site of a monument dedicated to those who perished in The Cataclysm.
Story[]
I could tell you where it is, but that would spoil all the fun...
This section contains spoilers! Read on your own peril.
Zombies infest this area because of a nearby Pagan Necromancer. If the necromancer is killed or his wand is stolen, or if the Pagan cornerstone in the SE corner is activated, the undead will stop coming back.
The monument also happens to be the location where the Builder's Chalice must be placed in order to activate the Final Glyph at the end of Thief: Deadly Shadows.