Shangri-La is probably at its best early on an winter's morning when you will also have a good chance of spotting a lyrebird nearby.
Sherbrooke forest consists of over 800 hectares of Mountain Ash forest, most of which has grown since the severe forest fires of the 1920s. According to Parks Victoria, the clearings result from successive fires at that time. The Mountain Ash lives up to 500 years and may grow to 100 metres high, making it the world's tallest flowering plant.
Three alternative parking spots are suggested. P2 is definitely the closest to the cache and a relatively easy walk of about 1.4km; however you will miss out on the full Sherbrooke experience. If you park at P1, the track to the cache is long and steep, but very scenic. Alternatively, park at P3 and enjoy a coffee at Grants picnic before or after.
If you have time, you can do the full loop (7.1km), starting from either P1 or P3 via Paddy's Track, Neumann's Track, Lyrebird Walk, Ridge Road and the Welch Track. You will also pass some other caches, including two of the famous 13th cache.
The terrain rating depends somewhat on the route you take. If you park at P2 or P3, a rating of 2 might be appropriate, but if you park at P1, the trail is long with some quite steep parts and a rating of 3 would be nearer the mark.
If you don't have a portable map system with you, and maybe even if you do, I'd recommend having a good look at a map of the tracks before you set out.