Oh, goody. Time for me to unleash a barrage of FFTA info!

First, the Helje Key. The Prison Break mission is made available approximately the same time as the tourney missions (Battle Tourney, Mage Tourney, Swimming Meet, and the Clan League). It is a battle mission in which you face two templars, and two defenders. Not that hard, but still, don't get cocky. Even after you beat this mission you can play it over and over again, getting tons of Helje Keys if you so desire (I don't see why you'd want that many. You need one to unlock Jagd Helje, and it just boosts the power of fire). Look for it in Sprohm when the month of Kingmoon starts up. This mission plays my favorite music in the game (and is the only mission available at the point I'm at that has that music, so I really enjoy this mission).

Second, mission items in general. You actually made a fairly smart decision to toss away the Magic Medal. True, you don't have enough for the quest (you are working on the quest "Who am I?", right?), but you can get the Magic Medal back. Any quest item that is needed for a quest can be recovered if you get rid of it. Eventually (the process for determining what quests are displayed is complicated, so I won't go into it now, but don't expect it to give you what you want when you want it), a mission to get the Magic Medal will come back up (the time you have to wait is about the same time as you would wait if you took the mission and failed it the first time), and you can regain your lost medal and go on. If, however, you had thrown away, the Sprinkler, for example, you can not recover it, since it is not needed for another mission. So the Magic Medal was a good choice.

Contradicting laws: No such luck. Whatever is forbidden takes precedence. If you use status effects while status is both forbidden and recommended, you will not get a JP, but you will get a card.

(SPOILER)Good luck with the Magus Sister's quest. You get a quest item from them that is one of the items needed to get what I consider one of the best quest items in the game: The Insignia! It doubles the AP reward from any mission where you take it with you!