The Elf Queen of Shannara
Like all Elfstones, the Loden was created during the Age of Faerie. During their efforts to recover the magics of the old world in the centuries after the passing of the Druid Allanon, the Elves rediscovered the Loden. The Loden was made for the single purpose of transporting the Elven city of Arborlon, and unlike other Elfstones which drew its strength from an individual, the Loden drew its strength from the entire Elven nation. Using the Loden, the Elves took themselves and their city to the island of Morrowindl. Once there, the Loden also was used to create a magic wall around Arborlon called the Keel, which shielded the city from the horde of Shadowen.
Later, Ellenroh Elessedil used the Loden to seal away Arborlon for transport back to Westland. Her granddaughter Wren Elessedil made it back to the Westland and restored to the city to its rightful place atop the Carolan. Wren then intentionally drained the Elfstone of the remainder of its magic as a vow that the Elves would never leave their home again. When she was finished draining the Loden, it had become a useless common rock, and the Ruhk Staff had become a charred, brittle piece of wood.
Genesis of Shannara
Long ago, during the Age of Faerie, the Elves had conquered the Demons that threatened to destroy the world, sealing them off in another world called the Forbidding. The linchpin of the barrier that kept the Demons in the Forbidding was the Ellcrys, a sentient tree that resided in a part of the world known to the Elves during the Age of Man as the Cintra. The Ellcrys was protected by the Chosen, caretakers specially selected by the tree herself.
During the Age of Man the Ellcrys told two of her Chosen, Kirisin Belloruus and his cousin Erisha Belloruus, the Elven King's daughter, that a force was coming that would forever change the world. The magical tree urged them to find the Elfstones and to use them to locate the Loden, inside which the tree could be safely sealed away for protection and transport during the Great Wars. (It is possible, that the Loden has been used before to transport Arborlon to the Cintra. At least, within the story, the Loden is not a new discovery, but an ancient, and almost forgotten, magic artefact. As such, it used to be quite valuable in the past, to the dead queen Pancea Rolt Gotrin. No previous locations of Arborlon are mentioned, though.)
Kirisin succeeded in finding the Loden and removing the Elves from the Cintra. He joined the caravan of Hawk, a gypsy morph, who ultimately led those who wished to survive the Great Wars to a safe, sheltered valley located in the mountains several weeks journey on foot east of Spokane. Once there, Kirisin used the Loden and released Arborlon onto a forested bluff, freeing the Elves once more.
Hawk used the last of his power to encircle and protect the valley and the people he had led into it in a magical wall of mists. After the final nuclear missiles were launched and the landscape of the Earth went through tremendous upheavals, changing into what would become the Four Lands, Arborlon and the rest of the valley's communities remained intact and protected.
Arborlon would thereafter remain in the place where Kirisin put it, even after the mists finally dissipated centuries later and the valley was once again connected to the outside world.