The items only drop when she's in Arrapago Reef. if you defeat her in Bhaflau Thickets she doesn't drop anything, it just ends besieged.
She is assisted by 4 Lamia Exon. Two are Black mages and two are melee.
You can easily handle all four with one melee/ninja and a White mage, on the Black mage Lamia, you can substitute the White mage with a Red mage.
Just have those 8 in a separate alliance while you have another take out Medusa
She drops:
* Medusa's Armlet
* Mercenary's dastanas
Mercenary's Dastanas RareExclusive
[Hands] All Races
DEF: 24
Ranged Accuracy +8
Besieged: Increases "Rapid Shot" activation rate
Lv. 70 WAR / RDM / PLD / DRK / BST / RNG /
SAM / DRG / BLU
if anyone knows anything about Medusa's Armlet post it lol, is it just for keepsake? it like has NO purpose O_o