You can get Ragnarok from the weapon shop in Narshe. The door is locked. Once you re-recruit Locke, head to Narshe with him and he'll open the door. Go in the basement and the old man will offer to give you either Ragnarok the Sword or Ragnarok the Esper. They both have advantages and sacrifices. The esper teaches Ultima, which is super cool. But the sword is ridiculously powerful and can be bid at the colleseum for the most powerful sword in the game, the Illumina. At least, I'm pretty sure Illumina is the best. Maybe not, but even if it isn't the best, it's still really good.