A fan coming from a WoW-centric item system asked about top quality items, and got a useful reply from Bashiok.
What drops TIER armors and LEGENDARIES?
i beat normal and didnt find any of it
Well there’s no such thing as ‘tier’ armor in Diablo III. We use the term ‘tier’ to refer to the visual cohesiveness of the art of items, not their power.
Legendaries have small drop chances. The game is really about killing monsters over and over for a small chance at very rare items, so yeah, you’re very lucky when you get those good drops. I’d recommend not focusing purely on Legendaries, though, as the end-all items. A perfectly rolled Rare, or even well-rolled rare will be better than a Legendary.
To answer your question though: Anything. Absolutely anything can drop any rarity of item, it’s just about drop chance. Rare and Champion packs have the best drops, though.
While Bashny is correct about item quality and scarcity, there’s still something so much more exciting about finding a shiny green set item, or a golden unique. Even if they’re now dull orange and merely “legendary.” It’s hard to get them in D3, though. Act Bosses and the other big mini bosses don’t drop higher quality loot, even on their quest drops, once you’re past Normal difficulty. Even Magic Find is scarce and grants not much of a bonus.
Players are finding and crafting some such goodies though, and if you want to see screenshots or add your own, we’ve got a forum thread dedicated to that purpose. So shiny!