Knotbone Chamber is located north and slightly east of the Gates of Madness. It is a good source for finding amber. Guarding the entrance are a few leveled creatures, as well as leveled grummites within it.
Upon reaching the Knotbone Juncture, a fight will be started between multiple Grummites and Elytras. There are also several chests with various loot, however a few are locked. Take caution while entering Knotbone Ruins, as the ceiling will fall down when advancing into the ruin.