Koloth died during the battle with the Albino in the first season episode "Blood Oath". The ones who found the sword were Dax, Worf, and Kor. Which means that only two people really know its location since Kor died during the Dominion War.
Doh! I got Kor and Koloth names mixed up all the time. I'm can picture the actors face, and I can hear his actor's voice. But I'm lousy at remember names.