Out of the Frying Pan: Hit an enemy with the Frying Pan
In order to get the Frying Pan with damage and augmentation slots you will need to complete the Hidden Booty Hunt side quest. In order to complete this quest you will need to find all six treasure clues and then dig up the frying pan in Orchard Farm.
Get the 6 Treasure Clues to find the Frying pan. The Treasure Clues can be obtained:
-Bounty Hunt silver quest
-Lost Trader silver quest
-Assassin Attacks after killing all 5 Assassins.
1.Witchwood Cullis Gate, at the Focus Site. Go behind it and wait for a few seconds, the assassin will come for you.
2. Knothole Glade, outside the main gates. Cross the bridge past the demon door, turn around and the assassin will come at you screaming.
3. Prison Path, simply go down to the dock where the Archaeologist was held, you will come along the assassin on your way.
4. Windmill Hill, go inside, or on top of, the windmill building. The assassin will then proceed to attack you.
5. Hook Coast, by the bell in the northern part of town.
-Knothole Glade by earning a score over 200 points in the Archery Competition (You have to beat your training high score from the beginning if you got that score over 200, Credit:
AR4DOR)
-Orchard Farm chest - When entering Orchard Farm from Greatwood Entrance take the left road, the treasure chest will be off to the left right before you enter the apple tree farm.
-Windmill Hill chest - Chest is found behind the Windmill.
After you collect all six clues travel to Orchard Farm and go to the Barn, in front of the barn is a group of haystacks to the left of the open door. Go between the haystacks and the front wall of the Barn and dig. You will dig up the frying pan, now just find an enemy and hit him with it. Achievement unlocked..
Alternatively you can dig it up from the very beginning of the game, but the Frying Pan will have zero damage and no augmentation slots.
The achievement does pop with the zero damage version and also rewards you 100 renown for found treasure. Thanks to ScuzzyBunny for confirming this. Be sure to pick up at least the treasure clue in Orchard Farm before digging, if you're going this method.Since it was pointed out, I will quote my own comment about the digging icon not showing up and having to assign it manually, "It doesn't appear, go into your inventory and manually assign your spade to one of the dpad buttons. The Spade should be in the items tab, with your potions and stuff. When you have it assigned you just hover over the spot you want to dig and then push the button you assigned it to, note that you will have to hold down RT before hitting the assigned button." You're welcome.
Source:
http://fable.wikia.com/wiki/Hidden_Booty_Hunt