The mission starts with Marche entering Materiwood, holding some Materite that he found. He's about to leave when a group of Viera enter, saying that they were tipped off by a streetear about Marche being in the forest. Marche realizes that the streetear was Doned!
Objective: Defeat all enemies
There is a Sniper, Red Mage, Elementalist, White Mage, Assassin, and Summoner in this battle. You should probably get rid of the Assassin first because she can instantly KO your units. If you have items that protect against KO, use them on your units. Don't equip any rare weapons or armor on your units, because the Sniper can destroy those with her abilities. Protect yourselves against Stop as well, because the Assassin has that ability.
The Sniper has Doom Archer, which is bad if you deal a lot of damage to her in a single turn. If you have a law card that forbids status changes, use that to save yourself a great deal of trouble in this fight. The Red Mage can use Doublecast, but interestingly, she hasn't mastered it, so if you have a thief steal her weapon, or have a Sniper destroy her weapon, she won't be able to Doublecast anymore, which is good, because Doublecast can be devastating. Keep your units far apart because the Summoner's spells affect a big radius.
Once you win the battle, Doned comes in and grabs Marche's Materite, then shatters it. He taunts Marche, and says that Marche has everything that he could want in the real world, while Doned can't do much of anything that he wants in the real world because of his illness, so he will always work against Marche's efforts to return to the real world. But after Doned runs off, Marche says to himself that Doned doesn't realize that Doned has something really important in the real world that Marche doesn't have.
Once that scene is over, Bervenia Palace will appear on an island in the map. If you go to Bervenia Palace, the next storyline mission, Present Day, will automatically take place. But before you do that, be sure to put an Angel Ring on Marche if you have one, and make sure that he has White Mage abilities, and give him the Auto-Life ability and the Curaga ability if you can.
In Bervenia palace, you learn that Marche still had enough Materite for Nono to be able to make a Lugaborg to give as a gift to get an audience on Gift Day. But after you go inside and wait around for a long time, Montblanc realizes that maybe something is wrong. Indeed, a bunch of guards come in and attack you, saying that a concerned citizen (Doned, no doubt) tipped them off.
Objective: Defeat all enemies
There is an Alchemist, a Mog Knight, two Gladiators, and a Templar. This room is pretty small, so use units that can do area attacks, because you're likely to be able to attack more than one unit in a turn. The Templar and Gladiators are very damaging, so you might want to deal with them first. The Alchemist can instantly KO, so disable that one if you can. You can steal his weapon to stop him from being able to cast Death. Bring some Maiden Kiss with you to deal with the Alchemist's frogshape spell.
After these are defeated, more guards rush in, but Babus appears and Stops them. He transports Marche to the throne room so he can talk to Mewt, because Babus has some concerns about the nature of this world. If it is truly just a dream that Mewt has created to avoid reality, Babus wants to convince Mewt that it's unhealthy. But Mewt, upon hearing this, feels that Babus has betrayed him, and says that he needs this world because he needs his mother, and if he went back to the real world, people would just pick on him. Remedi appears and comforts Mewt, but Marche tries to warn Mewt that she isn't really his mother, but just an illusion that Mewt has created. Remedi warps away with Mewt.
Then Llednar appears. Babus will go searching for Mewt and Remedi, and says that Marche's only hope against the invincible Llednar is to try to survive until Cid shows up to stop the fight.
This encounter with Llednar is dangerous. You have no hope of defeating Llednar, so your objective is to survive for five turns without dying. And Llednar has the Omega ability, which is sure to KO you. If you have an Angel's Ring on Marche, then he will be revived, but if you don't have the White Mage Auto-Life ability, you can only do that once. So, try to stay out of Llednar's reach, because he can't cast Omega unless he is standing right next to you. I found it helpful to hide behind the throne. Then, use Auto-Life on yourself if you can, and hope that you make it through this battle. If you survive for five turns, Cid arrives and ends the encounter.
Llednar disappears as soon as Cid arrives. Marche explains what happened, and asks Cid who Llednar is and where he came from. Cid's answer is stunning: he's Mewt. Llednar is actually the manifestation of the most violent and dangerous aspect of Mewt's personality. Like the Totemas, Mewt created Llednar to protect the crystals and his dream world. Cid leaves to help find Remedi and Mewt. Marche realizes that before he can convince Mewt to go back to the real world, he will first have to persuade Ritz and Doned.