Found the White Sword, but yes, the critical path needs to be definitely changed. Use weaker enemies as lures and stronger enemies as deterrents.
Edit: Screen west of Lv. 3 1st Quest, and 1 screen east and 2 screens south of Lv. 1 1st Quest: Black caves, no stairs.
BTW, also think you should just switch Lv. 3 with Lv. 2 honestly.
Edit 2: THANK YOU for not being a total dickhead with the DRC's.
Edit 3: Just finished 3. MUCH easier than 2, should switch levels definitely.
Edit 4: You got some difficulty going for you in Lv. 4 bub! Ow on the Blue Darknuts without the Blue Ring! Still took you down though, ha! lol
Edit 5: Critical Bug. After I take the Whistle->Stairs early, I get eventually to a room with two blocks. I push the block and nothing appears. If this is the Ladder, I'm fucked.
-James