To clarify: head east from NIKEAH, not Narshe. Or, if you really wanted, you could head back to the Returner's Hideout and do the Lete River again.

I ASSUME you did the Serpent Trench again to get Water Rondo, and not just for the hell of it. Right?

As for levels, I don't really remember, but at the very least try to have all of your characters at 1000+ hp.