We present spectroscopic observations of the type 2 quasar SDSS J11311.05+162739.5 (z= 0.1732), which has the richest spectrum of forbidden high-ionization lines (FHILs, e.g. [Fevii], [Fex], [Fexi] and [Nev]) yet reported for an active galactic nucleus (AGN), as well as unusually strong [Oiii] λ4363 emission. The study of this object provides a rare opportunity to investigate the physical conditions and kinematics of the region(s) emitting the FHILs. By comparison with photoionization model results, we find that the FHIL region has high densities (105.5 <nH <108.0cm-3) and ionization parameters (-1.5 <log[U] <0), yet its kinematics are similar to those of the low-ionization emission-line region detected in the same object (full width at half-maximum ∼360 ± 30kms-1), with no evidence for a significant shift between the velocity centroid of the FHILs and the rest frame of the host galaxy. The deduced physical conditions lie between those of the broad-line (nH > 109cm-3) and narrow-line regions (nH <106cm-3) of AGNs, and we demonstrate that the FHIL regions must be situated relatively close to the illuminating AGN (0.32 <rFHIL <50pc). We suggest that the inner torus wall is the most likely location for the FHIL region, and that the unusual strength of the FHILs in this object is due to a specific viewing angle of the far wall of the torus, coupled with a lack of dust on larger scales that might otherwise obscure our view of the torus.