The story continues even if you lose, and you only get the Gades blade if you win
Half of its actions are Destructo-wave, a non-elemental attack on the whole party (power 350), and the rest are normal attacks. Uses no spells.
At this point, the only way to hit its light weakness is the IP skill Light attack on the Light knife, found on Alunze Castle B4. Anyone can equip it.
Destructo-wave is a skill, so the target's DFP reduces it, and damage to party members using Defend is also reduced. Maxim, Selan, and Tia can learn Bravery (1000G) at Clamento's spell shop, and Selan can also raise DFP with the IP skill Ironclad on the Bracelet she starts out wearing.
For recovery, rely on Strong from Tia and Selan, and the IP skill Re-energize on Selan's Light dress and Guy's Tough hide
After delivering the Treasure Sword, you can get the Holy wings in the basement of Parcelyte Castle. Put them on Selan or Tia to heal the whole party with the IP skill Holy healing.