At the Otafu Base, you rescue Ninja Woman Yae, who tells you to visit the wise man in the village of Iga.
Warlock Zone V: Iga
In this area, if you see a girl with a walking stick that has a ring on top, don't hit her or you will lose $50. Instead, collect her to get $100.
Near where you arrive, there is a house where you can optionally talk to a villager. There are "Wolf with Child" enemies that consist of a man pushing a stroller, and the baby in the stroller shoots bullets at you. Don't approach Wolf with Child from behind, because the damage area around him is wider than it appears.
To the right of the villager's house, there is a dice game, and to the right of that, a bridge. To the right of the bridge, there is a hotel.
Go to the right from the hotel but stay near the north edge, and you will reach a wooden sign. Hit it to find a hidden object worth $100. The object is TwinBee from Konami's TwinBee series.
Go south from there, but beware of falling rocks. Then you will arrive in front of some caves, where some wild boars are charging out. The caves that don't have boars are occupied by shops. From left to right, there is: a shop that sells sandals, large bombs (which get very expensive the more you buy), and pizza slices; a Jutsu school where you can learn techniques 1 (tiger for Kid Ying) and 3 (flying for Kid Ying); a shop where you can buy iron helmets, chain armor, and whole pizzas (which get pretty expensive the more you buy); and a logbook shop where you can get a password to continue the game later.
To the east, be careful of another wild boar to the north, and a second one slightly farther east that charges out of its cave at an angle.
NOTE: If you didn't purchase the #3 Jutsu (flying) from the Judo guy in one of the caves between wild boar caves, you might want to get it now. It's partly useful to get an otherwise inaccessible power-up in the next part of the area, and may also be helpful in the upcoming boss battle.
Go northeast from there and watch out for ninjas in the trees that throw bombs at you. Keep going north and push on the wooden doors to enter the Ninja Castle.