I also got one off velium horror in velks. The wind instrument, to be specific. Afaik, all instruments are a rare drop from any T2 named (velks, kael, tofs).
For those asking, bards agree not meant to equip these and use them in combat in lieu of dual wield. First off, the dmg bonus does not make up for not having an offhand equipped. Second, the instrument mods are already capped for group geared players using rk2 songs (based on using tov visibles). You would only utilize the full mod on these items if you have rk3 songs but lack raid level armor.
The purpose of these instruments is the click from inventory effect. Coincidentally, the TBM raid drop instruments cast the same songs that these do. However, currently songs cast by item click do not get focused by your worn mods like songs cast from a gem slot. Because of this, these click effects are infinitely inferior to just using the song the old fashioned way. There is a thread on the official forums petitioning to change that so maybe something happens on that front.