"I'm just here to lead you astray."
The torch card can be found in the Underground Labyrinth. The actual true entrance is a warp located at (2, 3) where (1, 1) is the top-left corner of the map in (x, y) coordinates.
Depending on where you are, you can enter the path from the bottom-left most room, swap to enter a room to the south.From here, solve the puzzles to advance eastwards until you reach a room with a chest. The chest contains this card.
Alternatively, you can skip the puzzles by swapping the exact correct tile to enter the room which holds the chest, at location (6, 8) on the map (see screenshot for exact tile to swap).