Piotyr's ghost will give you this quest first, but strangely, you cannot do it until after Davy is freed. Anyway, ask Magda about how to free the Rusulka. Then follow these directions from the Gypsy camp: south, west, south, south, west, south, west, west, west, south, south, west, west, west, south. The Rusulka will appear in the lake...without any clothes on. Don't try to touch her (you'll die), but rather give her some Flowers.
Go to the Graveyard and check the two graves to the right of the tomb (the small building on the right side of the screen). Return to the Rusulka, and you'll tell her her true name, as well as learn the truth about her death. Ask for her hair, then return to the graveyard.
Go back to the Graveyard at night. Use the Hair on the Handbroom and beat the grave of her fiancee. His ghost will appear. Defeat it (it's the same as a Wraith), and return to the Rusulka yet again.
It seems like your little action just about killed her; she's quite literrally rotting in front of you. Despite this, give her a kiss good-bye. She'll finally be able to rest, and you'll get rewarded with Honor, as well as another quest with even BETTER rewards!