Zelda joins the priest at the Sanctuary and speaks of the wizard, who said "once I have finished with you, the final one, the seal of the wise men will open". She warns that if the wizard succeeds in breaking the seal, evil power will overwhelm the land.
The priest says the Master Sword is the only weapon strong enough to defeat the wizard. He marks the location of the village elder on your map (press X to view the map), who is said to be a descendant of the seven wise men and may know of the sword.
Before continuing, be sure to grab the chest above the priest for a full heart container!
Now you're ready to leave the sanctuary, where you discover that it's full daylight.
First, let's head for the village where Zelda marked your map. From the sanctuary, head south until you hit water, kill the soldier and head west. Head west again, killing more soldiers if necessary, and finally there's a gate to the south; go through it.
-- Kakariko Village --
First, head west along the stone path. When it ends and you hit some small pink trees, continue west and a little bit down so you're on a ledge. Below you there is a cave opening and a hole. Drop down from the ledge into the hole.
Get all the chests and pots here for three bombs, and 70 rupees. Then go over to the part of the wall where you can see what looks like three loose stones. This is a wall you can bomb to open! If you ever see a crack in the wall but aren't sure if you can bomb it, hold B and tap the wall with your sword. If you hear a "ding" intead of a "click", the wall can be bombed.
Press start to choose the bombs from your inventory. Walk up to the bombable wall, press Y and move out of the way so the bomb doesn't hurt you when it explodes. When it does, the wall opens. Go through.
By the way, once I've set off a bomb I like to go back to my inventory and select the boomerang to make sure I don't accidentally place another bomb.
Get the pots for 10 rupees and two hearts, then open the chest for your very first piece of heart!
Now leave this cave; jump down the ledge and go out.
Head east to a stone building with bars on the windows. The guy inside says it used to be a thieves' hideout. Go downstairs.
To solve the block puzzle to get all the chests, press the second block from the left down, the top right block down, the top left block left, the block directly below you down, the block to your left left. Then go back up and around to the second block from the right, push it down, then push the block to your left left. Now you should be able to access all the chests, earning you 80 rupees!
Next bomb the crack in the wall. Go in and pick up the pots for 30 rupees, then open the chest for another piece of heart.
Leave this building, and from here head south down the stairs. To the left is a guy sitting by a bunch of pots. Talk to him, and buy a bottle from him (you should have more than enough money by now).
From here head south, then east. To the southeast of the weathervane is a house with a bunch of bushes to the left. Go inside and talk to the kid in the bed to get the bug-catching net.
Now head straight south across the path and through a gap in the garden wall, into the building below. Pick up the pot in front of the chest and open it for another bottle! If you pick up the pot above the chest you reveal a chicken. In this game if you harass a chicken long enough, its friends will swoop down and attack you until you're dead (unless you go into a building), so leave them alone!
You should have one bomb left (at least), so leave this building and head left to the pink path, then straight down until you can't go any further. Head east until you reach another gate, and go through.
Jump down the ledge and head west. In the southwest of the screen is a building that extends into the next screen. Go in, and bomb the funky wall in the west wall. Go through, and exit on this side.
When you approach the woman, she tells you that if you make it through the maze in 15 seconds, you win a prize. Approaching her will start the race whether you want to or not, so be careful.
To win, cut down all the bushes going straight up in a line, then continue cutting the bushes above you, cutting upwards when you can. When you reach the top, go into the fenced path and go all the way north, to a long line of bushes heading left. Cut through all of them, then head south, it's pretty much a straight shot to the kid guarding the piece of heart. If you did it in 15 seconds or less, you win! If not, jump down the ledge, go back through the building, and try again until you get it.
Now we'll get you one more piece of heart before the journey to the elder (you could find out where the elder is in town but you don't need to because I'll tell you).
Go back into the village through the south entrance. Head north. As you go along you'll see a woman pacing in front of her house. Don't get close to her or she'll run into her house and call a soldier! Instead, sneak into her house. Inside, pull on the painting until 20 rupees fall out.
Go back outside, avoiding the woman and continuing along the path heading north to reach the north exit, go through.
Go right and up beyond the fortune teller's house, killing a couple of soldiers in green. Continue up and go into the dark opening in the trees.
You'll be returning to the Lost Woods later, but for now all you want to do is go straight up, killing the crow that attacks, and continue up until you see a stump with some bushes behind it. Don't go in the stump, but instead cut the center bush to reveal a hole. Fall in, and you get your fourth piece of heart, completing a new heart container!
One last thing before you go, once you leave this area through the stump, head northwest until you find a mushroom. Pick it up. There's nothing you can do with it yet, but I'll tell you where to use it.
Now you're ready to find the elder. Leave the Lost Woods the way you came in, then go south until you reach the path leading eastward. Continue east, past the Sanctuary, past the graveyard, and the path turns south. Follow it, and go across the bridge to the right, killing or avoiding the bow and arrow soldiers (your shield will deflect their arrows unless you're swinging your sword). Exit south.
You come upon a field of rocks with octoroks all around, hug right wall and continue south until you can exit south.
Between the statues you see a path heading east, so go that way, then exit north through the mountain pass.
Go north under the arches, up the stairs, past the statues and up and right through a narrow passageway. Ahead of you, you see a small building down below. Jump down and go in.
This is the village elder! Talk to him and he tells you that you must collect three pendants to be able to wield the Master Sword. When he asks if you really want to find it, you can either say "yeah!" or "of course!" I like to say "of course!" because it sounds a little more mature, but either way it won't matter what you say. He'll ask you to get the pendant from the palace to the east (he marks it on your map), and he'll tell you more of the legend and give you a magical artifact when you return.
By the way, don't bother bombing the cracked wall in the back, you'll be able to break it open without bombs later.
Leave Sahasrahla's hut, and go up the stairs behind it. If you're too close, the armos statue by the stairs will come to life and start bouncing towards you. Oooh, scary! Just swat it out of the way or ignore it and go up the stairs.
Head left and down, then continue east on the path. Wake up the statue on the way and kill it, then continue east. A little to the southeast is a gap you can jump down, so do it. Then go up the stairs above. Go east up the next set of stairs (killing the armos statue), kill the blue soldier on the way, go up the stairs and then continue going up to get into the palace.