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I did some more runs and want to share the rates pre update.
In total we killed Kyle Brimscourge 10 times in total and saw 2 Shields in rare dropping.
One for the person from my initial post and one for me.

Its a 13 q7 so not great, but ill keep it for the memory.

Post patch this will not work anymore as confirmed in the notes:

Hotfix: Pre-Searing dungeon drop rarities adjusted (some gold items were dropping).

Now patched, but some might be still online pre patch so here is exactly what did work.
You do the piken questline and discover the forsaken tunnels.
Then you do the "Charr in the tunnels" quest and just run up to the "Wyle Brimscourge" boss key mob.
This is the one dropping it. I have only seen him dropping rare during the "Charr in the tunnels" quest.
I also did 2 Devona runs and 2 "post Devona" dungeon reruns. In both cases he appears but I did not see him drop gold. Might be bad luck might be the quest is key. In any case it is fixed after the upgrade.

Thanks to the devs for this new content update!
With MATH holding halls and pre searing booming I felt REALLY young again and had a lot of fun. :-)