Looted from an NPC named 'Zombie..?' in a secret part of the Broken Back Hole, accessed from the Old Falkreath Vault.
From the opening chamber of the vault, make a right, breaking down the stone wall. Make a left to enter the collapsed tower in the large cavern room. At the bottom of the tower, on the steps by the entrance, turn left and head directly towards the wall. The ladder is hidden near the edge.
Requires Skyrim Underground.