Lunar staff - pt2 is made by using a dramen staff on the air altar and fire altar during the Lunar Diplomacy quest. After using the staff on the water altar and earth altar (in that order), it becomes a lunar staff. After the quest is complete lunar staves can no longer be made through this process. Despite the inventory sprite looking like a plain wooden staff, it appears to be topped with an air orb when equipped.
A player enchants a lunar staff.