I have had the most success finding mist wood in Marleybone. Mist wood is a much needed item for crafting and it seems like that there is very little of it versus the high demand. If it being a rare thing isn't bad enough it seems as though it doesn't come back in predictable places nor does it return in the same place after someone finds it. I don't know if the makers of Wizard101 intended it to be so hard to find but at this point it is.
Having done extensive searching myself and asking around the concensus is that the most of it is found in Marley for now. This may be due to the fact that Marley is the least popular world and a difficult one (street-wise). Places like Hyde Park and Chelsea court etc. seem to have some more than other places. In Marley there are fewer side grass areas to hide it in and they tend to be on the side of the street and perhaps easier to spot as well.
If you find a watery area you can often find cat tails such as the pond near the arena in Unicorn Way. You can find mushrooms it seems in a lot of places including Colossus Boulevard in the grassy areas.
If anyone else has good tips on where to find Mistwood please leave a comment.
Mist wood, myst wood, mystwood