If you've followed the Lost City guide and brought unfinished Ranged and Magic equipment, then you can stand in the middle of the mushrooms on the south side of the cave and safely kill the spirit without being hit. If you haven't brought any unfinished weaponry, then you will have to either punch the spirit to death or kill a Zombie until it drops a hatchet and then use this to fight the spirit.
Once the spirit is dead, you will be able to cut the tree and obtain a Dramen branch to make a Dramen staff to finish the quest.
After completing Lost City, the Tree Spirit appears as a Class F boss in the Dominion Tower.
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