Go to Dr Caligari's Sideshow (west of Thomas Johnson) and be there when 11pm rolls around.
The show will start and Dr. Caligari will tell the audience to ask his weird demon-friend a question.
Note: this is not the real version of Cesare, do not kill him.
When Dr. Caligari says 'Any other questions?' and looks directly at you, say When will I die.
Cesare will respond, 'Tonight' and both Caligari and Cesare will disappear.
You NEED Detect Hidden.
He is in -- In a Small and Unadorned Tent -- nnnn from the Strong Man
At this point if you can hunt Cesare, then the real version has spawned.
Ring doesn't always spawn.
Supposedly you're intended to walk to Caligari's tent in the west of the carnival and be attacked Cesare, but I have always hunted him instead.