After you gain the power of the Fire Seed, you should go to the Ruins of Pandora, where Elinee sent Dyluck to Thanatos.
Level Up
Be sure to level up Primm and Popoi's magic. To level up Gnome, have Popoi use Speed Down repeatedly, and have Primm use Defender. The magic levels increase more quickly if you are holding weapons, so keep that in mind.
Go to Pandora
Pandora is south of the Water Palace. There is a stream southeast of the inn, and a bridge crossing the stream near there. Go south on that bridge to find a blue-haired girl in a green outfit wandering around. Talk to her. This is Phanna, a friend of Primm's. When you talk to her, she'll disappear. Go south from where you found Phanna to reach the ruins.
Pandora Ruins
Go to the steps leading up to the ruins to find Phanna. Talk to her again. She says some weird stuff and slaps Primm, then pushes past the guards. Primm shoves the guards out of the way. Now go into the door up above.
There are some tough enemies in the ruins, particularly Tomato Man, and the Zombies that the Tomato Man creates. Most of your attacks will miss, and they have strong attack. You might want to just run past them.
In the first room, go north and use the door in the north wall. The next room has a couple of Chess Knights and some stairs. Go down the stairs.
The next area has an Evil Sword followed by a Tomato Man and Zombie. Follow the path until there is a fork in the road. Go south at the fork in the path, then go down the stairs.
The path in the next area is straightforward. At the end of this path are some stairs leading down. In the next area you won't be holding weapons.
Go to the left and up. You will find Thanatos up on an altar. He makes Phanna appear. He has drained her energy and turned her into a faithful servant. He wants to control the world with the Mana Fortress. He makes Dyluck appear. He has also had his energy drained. Then Thanatos opens a hole under you in the altar. The north wall is a boss: Wall Face.
Wall Face
Focus all of your attacks on the middle eye. It can be attacked even if the eye is closed. Have Popoi use Earth Slide.
After you defeat the wall, you get the Bow's Orb.
Thanatos returns the villagers to normal, but he takes Phanna and Dyluck with him. Jema is walking around this area. Talk to him and he will say to go talk to Luka. After you talk to him, you automatically leave the ruins.
Before you leave Pandora, visit the King in the castle. He's in a room to the left of the thrones. He will open the treasure room for you. The guard at the stairs in the King's room will leave, so go down those stairs to reach the treasure room. You can get some gold and a couple of weapon orbs in there.
Go to the Pandora armor shop and buy Cobra Bracelets.
Now go back to the Water Palace.