The Treasure of the Onyx Dragon

You're spending the summer with your Aunt LYdia on Orcas Island, in the Pacific Northwest. You've always been curious about the island's legend of the Onyx Dragon, a treasure ship that mysteriously sank off the coast over one hundred years ago. When you stumble upon an old letter, you decide to search the ship and its precious cargo - the infamous emerald known as the Star of Asia. The letter provides you with three clues. Where should you look first?