For this one, you'll need to head to Narshe. Remember, it is on the north-central continent, towards the west side. It is marked by a mountain path. You'll also need Locke for this so check the "Finding Locke" section if you haven't found him yet.
If you've followed my guide thus far, you should have pretty much everything else here. So, anyways, if you investigated the buildings last time you were here, you probably noticed that they were locked. Only Locke (pardon the pun) can unlock them, so you need to bring him along. The only building worth going for is the weapon shop, west of the main northbound path. Unlock it and head inside. Inside, go into through the hidden path east of the main one to find a man. Speak with him ... you'll be offered a Magicite. The man, showing his stupidity, offers to give it to you or grind it into a sword.
GET THE MAGICITE !
You can get more Ragnarok swords in other places; the Magicite is one-of-a-kind and not taking it now means losing it FOREVER. Do you really want to pass up on this? After all, the Esper will teach you Ultima (needs 100 AP, though) and can use Metamorphose in battle, which turns enemies into items. Sometimes, you'll get nice equipment, too. If you're fool enough to get the sword, proceed to throw your gaming console and yourself in front of an 18-wheeler. Yes, the Esper owns the sword that badly.
Anyways, leave the weapon shop and go north to an unmarked house. Go inside to find a man; speak with him to receive the Cursed Shield . This shield is rather terrible, for several reasons. First, you'll inherently get Doom, Sap, Silence, Confusion, and Berserk, so you'll want to put a Ribbon and a Lich Ring on. Secondly, it REDUCES some stats. And it makes you weak to ALL elements.
However, after around 250 battles, it'll transform into the Paladin Shield . (The character must be alive at the end of the battle and not be Gogo for it to count.) The Paladin Shield absorbs Fire, Ice/Blizzard, Lightning/Thunder, and Holy, and nullifies the rest. It has one of the highest Defense and Magic Defense increases anywhere, and boosts both Evasions by 40%. It'll even teach you Ultima (requires 100 AP, still).
So, yes, I suggest you go out for about two or three hours to try and uncurse that Shield. There are two suggestions to make it worthwhile. One is to go to a hard area (you take your pick; I'd choose Kefka's Tower and teleport out with a Teleport Stone) to level everyone up, or go to Solitary Island in the southwest corner of the map and have Locke Steal bunches of Elixirs and Megalixirs. Both get you the AP, too. Anyways, we're done here.