Ysmala'n seems to be found in two places. She is definitely in the Morgue early on, but there is no message and camera pan as there is with other potential Incarnates. If you are in Kay'l's body when presenting the Jaunpar Pass to the Mecaguard, it will kill him and she touches his corpse and becomes the Nomad Soul. She is also said to be at the Hospital, and could possibly be possessed at that location at some time.
Fate is more strongly pushing for Ysmala'n to become the Nomad Soul than other player characters. The police under the demon Gandhar have a warrant out for Kay'l 669's termination. If he tries to enter Jaunpur he will be shot by the Mechaguard and his body is taken to the Morgue. Ysmala'n examines him and in doing so, touches the Nomad Soul and triggers Kay'l's transformation into Ysmala'n. If Kay'l has lost a battle with an enemy and reincarnated as another character already (which is a Destiny that is also strongly manifested, as the demon that snatches Telis is very powerful), this never takes place because the new character is not subject to the same termination order. The Nomad Soul is also free to use the Reincarnation Spell to become another character (see the blue expandable list on all the character pages) before going to Jaunpur, after reincarnating into Ysmala'n, or almost any time afterwards.