Not far from the entrance, a group of men will be talking. If Scarlett speaks with them and tells him her name, they will recognize the name and admit they are Rebels who oppose the current activities of the Doge. if she tries to encourage them (fire them up or question their courage), they will ask her to perform this Quest.
Scarlett should approach the ship anchored along the Pier with the Lighthouse. If she goes there during the day, two Guardsmen will be on duty and will not allow her on board. At night, these guards get "sloppy" and leave their post, so Scarlett can board the ship.
On board, she should go down (towards the bow) into the cargo hold and find the explosives and ignite them. (There are two Marauders onboard who she will either have to kill or avoid.)
(Click on the map to enlarge it.)
After setting off the explosives and watching the ship sink, Scarlett should return to the Skullbreak Tavern and tell the Rebels that the ship is destroyed to complete the quest.