Anyone know what level they start popping up? I'm level 42 now and have been to a number of caves inhabited by Falmer, and still haven't seen them. Are they only in areas relating to the DG quests? Or am I just not high enough level?

They show up anywhere you find Falmer. Don't know what level, though. I am guessing 50.

I would agree..

Ah well, I suppose I still have quite a bit to go then until I'm 50. I only want the armor for a new role playing idea I was trying out... looks like it's back to grinding for a bit. Thanks for the replies!

I'm level 40 and just started getting them...

Well I tried my luck numerous times at 42, then pushed to 45 and still no dice, but after I hit 50 it was no problem.