I made this Fool's Cap farming guide to help out players who want to farm the herbs instead of buying them from the Auction House. You can pick this Herb from skill 1, but you will only get [Fool's Cap Spores] until you reach Herbalism skill 480-520 (10 makes one herb).
Dread Wastes, Townlong Steppes
This herb can be gathered near muddy areas in Dread Wastes and Townlong Steppes. Fool's Cap is pretty rare, so it's best to combine these two zones for farming. But if someone else is farming in the zones, you pretty much won't find a single herb because there are so few places where it spawns.
While traveling in Dread Wastes, you should pick [Sha-Touched Herb] as long as you can pick it without pulling a bunch of mobs. There is 17% chance that it will contain Fool's Cap.