It can sometimes be found in the fireplace of Leoric's Manor in Act I. The fireplace is located at the end of a hall on the right side the manor in the entry area. If the item is in the fireplace then there will be burnt logs that one can interact with, if not then the fireplace will be empty and the player will have to quit and continue again to give it another chance to spawn.
The fireplace appears to always spawn, but the logs may not.
Can be found in Adventure Mode, which appears to have two fireplaces in 2.4.1 (bone is found in the lower fireplace near the entrance to the manor). When inside, just head back on the stairs and find a large chamber with the fireplace at the end on the right side of the map. The entrance to the chamber is quite small, but it is on the far right side of the Manor.
There will be a checkpoint that will allow a player to leave the game and rejoin it in the mansion to quickly farm the item.
"This charred piece of Leoric was clearly once connected to his ankle and knee."