I'm sure someone will come along with a better answer but I believe it is referring to one of the trees near the top right corner of the map, in a screen with only one entrance and exit. Try bombing the tree. You can walk through one of the walls on the top of the screen like the one I described as well. Sorry I can't be more specific but it has been a while.
i was never stuck...i knew like everything about that game...and i mean everything...but you know that guy who says that is under an armos near the warp point by the penninsula and i figured he meant something involving Second Quest since hes there in Second Quest too...someone on another rpg forum thought he meant the warp point by the fairy fountain....i dont know about Level 8 since that isnt at a dead end....but im sure its about something i already know about but i just couldnt figure out what...(unless he was talking about the location of the Letter in Second Quest...)