After defeating the Mantis Ant, you receive a Sword Orb, and the man who talked to you earlier will pull you up.
Learn about Luka
Jema says that only you can recharge the Mana Sword, since you're the one who pulled it out. Jema tells you to visit Luka, the Water Sage in the Water Temple, to find out what to do next.
Talk to the Elder
Then go into the northeast house again. You learn that monsters will keep following you now that you have to carry the Mana Sword. The people of Potos decide to banish you. On your way now!
But before you go, go downstairs and open the chest to get 50 GP. Go back up and do whatever you want to do before you go, because you'll never be able to come back. If you didn't buy a bandanna from the shop, do that now. You can save the game by going to the inn, saying "no" when asked if you want to stay the night, and saying "yes" when asked if you want to save the game.
When you are ready, talk to the guy in the southeast corner of town. He will push you out and you will have no choice but to leave.
Now you have to make your way to the Water Palace.