Where the hell do I find the balm mushroom??

You can find one in Striaton City or the Abundant Shrine (both are hidden items, so use the Dowsing Machine for help). It can also be found on a wild Paras/Parasect/Foongus/Amoonguss at a 1% chance.

Also, there is a B/W Questions thread that's stickied in this forum, so if you have any other questions like that, feel free to drop it in there.