When you get by all of the Funguars in the bottom of the ravine, there is a cave that opens up, go to the left, past the crabs, and he will be in an offshoot from the main area.Then, talk to every single person on the way back up the ravine to get his sword, as it appears to be at random who has it. Note: may also be the first person you talked to about the quest on the very top of la thienne plateau, out of the ravine entirely.