After making it through Norfest Forest and hearing from the people of Litz that Sylvain Castle is haunted, you must go to investigate.
Explore the Castle
If you find yourself having trouble in this dungeon, kill enemies until you level up, going back to Litz or Loire to heal. Level 20 is a good minimum level to have here.
Go north past the fountain (which Yomi says is full of acid if you walk up to it) and enter the main castle. Go to the left and follow the path to find Stardew. Then go back to where you entered the main castle.
Go north to find some really weird portraits with no eyes. Go left and up the stairs. You will be in a four-way path.
In the four-way path, you can optionally go north to the throne room to learn more of the story, then back in the four-way path you can go east to the library where you can learn more of the story.
Otherwise, in the four-way path, go south, then go east to find the chapel. Go east and north to enter a darkened room. Go north to make skeletons appear. Kill the skeletons here to release a spirit near the upper part of the room. Allow it to follow you. Leave the chapel and go southwest to return to the room with the hanging chandeliers. Then go all the way west and enter the door to reach the royalty room. Go west to go outside, and go to the northeast of the area to get a VestArmr. You can also find Magirocks, a Strength Potion, and Gems in the Royalty Room. You have to jump while on a rope, and press down after jumping to reach the ledges.
If you are under level 20, the next part will be difficult. You might want to buy some FireRings at a MagiShop before you proceed. The nearest one is in the Indus River, which is southwest of the village where you woke up at the beginning of Chapter 3. You should also buy ElecRings in Loire.
Return to the first room of the castle and go east past the portraits, then go into the door. Go north until you reach a suit of armor. The spirit that started following you back in the chapel (see previous paragraph) will enter the armor and attack you.
The Soul Knight has 172 HP. If you have FireRings, it should only take three blasts from the FireRing to kill it. To use the Fire Ring, equip the Ring Box and press X to see which rings you have. Press up or down to select the Fire Ring, then press the attack button to cast the fire spell.
The Soul Knight throws its spiked ball toward you, and the torches nearby will shoot flames at you. The Soul Knight can only throw the spiked ball in a straight line, so avoid being directly in line with it. The Soul Knight will raise its shield if you get close, so you have to keep your distance to make the Soul Knight throw its spiked ball, then quickly run in and attack when the Soul Knight is pulling back the spiked ball.
After the Soul Knight is dead, the bridge in the lower level extends. Exit this room, go south from the paintings, then go east and follow the path to the room where the bridge extended. Go up the bridge. In the next room, go west and up into the next room. The blood skeleton collapses after you hit it, then comes back to life. Just keep hitting it when it revives and it will eventually die.
Go north from there. You find another Soul Knight in here. You can try to kill it, or just avoid it. Open the chests to get the Tower Key and the Icepick weapon.
Go back the way you came and go up the stairs in the wall between the suits of armor. Follow the path and you will reach a machine. You have to enter the correct number into the machine. If you went into the library earlier, you would have found the number 286, which is the year that Columbus returned from his voyage. This is the number to enter in the machine. To change the numbers, walk onto the barrels and push the back wall to make the numbers change. When the correct numbers (286) are entered, you will hear a mechanical sound.
Go back the way you came until you are in the room with spiders and suits of armor. Go east in this room and follow the path. Crawl into the small hole in the back wall and keep crawling upward until you get the Black Opal.
Crawl south to get out of the crawlspace, then keep going south and use the exit in the south wall.
Go to the northeast corner of the area and equip the tower key, then press X while facing the door to unlock it. Then open the door and go through.
Go down the stairs. Kill the Soul Knight and the gate will open. Go north and then walk west across the gates in the acid. Continue along the path. Get the Magirock on the way. To the north, you will see some snake statues. First, go southeast from there to find a DEF potion. Use it now to permanently increase your DEF by 1.
Go back to the snake statues and examine the middle one. Put your hand into it. This makes the water turn blue.
Go back the way you came until you are in front of the door that you unlocked with the Tower Key. Go to the northwest corner of this area and use the Tower Key on the door. Open it and go through.
The path here is straightforward, so just keep going until you reach the top of the tower. Walk through the eastern wall and Yomi will push you to the other tower. Climb down the vine to get the Topaz. Climb all the way down until you fall down below.
Go back to the paintings, and go west from them, then go up the stairs at the end. Go south in the four-way room, then go to the right and walk onto the rightmost chandelier. Start running diagonally southeast, then jump off of the chandelier. If you did it correctly, you will reach the treasure chests. Make sure that you are running diagonally before you jump. You can't change direction while jumping. Open the chests to get a Ruby and L.Bulb. Do another diagonal jump to go back onto the chandelier.
Go south from the paintings until you are outside. Jump into the fountain in the middle to get the Sapphire.
Go back to the paintings and the jewels will react. Afterward, there will be a big hole to the south. If you are ready to fight the boss, fall into the hole. But be aware that the boss will take a long time to defeat unless you are at a high level (which you can only achieve through grinding). To make things less difficult, stock up on ElecRings before the battle, and level up as much as you can.
The Dining room is a good grinding spot. Go to the far east door of the main hall (where the paintings are) and go up the bridge that extended after you defeated the Soul Knight. You can kill the two skeletons in here, then go east, then run west and use the Slicer attack (attack while running) a couple of times to kill both skeletons quickly. You don't have to wait for the skeletons to explode to get the EXP. You get the EXP as soon as the skeletons start shaking.
When you're ready, fall into the hole that appeared in the floor south of the paintings.
You fall into a dungeon. Four monsters spin around you. When they stop, hit the one behind you. The one behind you is always the real one.
After the dolls disappear, go north, then east, then north again. Talk to the person. You will be transported to another part of the dungeon. After a moment you will hear a voice that says you can walk. A moment later, the voice will repeat "Simon says". As soon as the second "says" is on the screen, stop. If you are moving when the voice says "stop", the dolls will move you back to the beginning and hurt you.
When you reach the east side, you find another monster. Hit it to start the boss fight.
Use ElecRings if you are level 24 or below. Equip the LightRod to do the most damage.
When you defeat her, you will be back in the dungeon. Talk to the man there. When you are back in Litz, leave the hospital and go north and rest in the Inn. During your sleep, there will be a cut scene. Agree to protect the princess. After you wake up, go to the hospital. Talk to the woman behind the counter to get Fever Medicine.
Prepare for Loire Upgrades
If you haven't already, go to Loire and talk to Matis until you get the painting, talk to Marily (in the back of Papilo's) until you get the Fancy Clothes, talk to the wine seller until you get the wine, and talk to Pierre until you get the Camera.
You can go to Loire Castle and do the speed-eating contest to get a Magirock.
Go to the harbor southwest of Litz. Talk to the captain and then talk to Fyda. Get on the ship. Go into the room on the right of the ship (the door is under the stairs) to get an L.Bulb. Then go back to the previous room and rest in the left-hand bed. When you wake up in the night, leave the room and fight the ghosts, only one of which is real. You can't harm them when they are whirlwinds, so just wait, or let them catch you. After they are gone, talk to the princess, then rest again.
Then next day, leave the ship and you get the Royal Letter. Equip it, then press X to read it. Go to the southern part of the harbor and go into the cabin to get a Magirock. Then go north to reach Freedom.