How to Get The True Ending
How to obtain this ending:
Beat Lord Darkdread in the Castle, then exit the room to the left, from where you entered.
DO NOT listen to The Spirit. Instead of sealing the darkness, keep punching the seal. The Spirit will be annoyed at you and will ask you to stop. Keep punching the seal until it breaks.
The Spirit will be very ticked off at you and call you a ‘traitor’. The castle explodes and the screen will cut to a damaged Munch doll falling onto the ground, and the island will start crumbling. The residents of the island will consider leaving but the villagers still believe that Munch can still fix this mess. Munch possesses the doll and prepares to settle things once and for all.
The Final Battle
The village elder will ask Munch to prepare before heading for the final showdown. Stock up on healing items and upgrade the milk to the max. Once you’re prepared, head to the right to meet up with To-Ri. He will take you the final boss, The Spirit. The Spirit has 3 phases.
She fires light arrows at you, in a bullet-hell manner. Nothing too extreme, but still pretty hard to dodge. Occasionally, she will fire out grey floating slimes which can be eaten to fill your fullness meter.
The Spirit transforms into a dragon and has much more attacks. In addition to the light arrows, she now has a homing and charging attack. For the homing attack, she will fire one slow-moving electric orb at you. It is possible for you to break it by punching it. Breaking the electric orb will spawn out grey slimes for consumption. For the charging attack, she charges towards you 3 times in a row. Note that this attack is very difficult to dodge up close, so get as much distance as possible when she starts to target you.
The Spirit will transform into a MUCH bigger dragon. The head and the 2 hands of the dragon will appear with disappearing mid-air platforms. There will be platforms appearing and disappearing around her head, jump on it to be able to hit her. Note that you can only do damage to the head, attacking the arms is extremely pointless. You’ll find that you will deal almost no damage at the smallest size, but fear not! The islanders will aid you by dropping food onto the battleground. Even without food assistance, this phase is still much easier than Phase 2.
Her arms will fire light arrows in a circular pattern and will sometimes smash the floor, creating pillars from the shockwave. The pillars travel from the current arm to almost the middle of the screen, and this attack is pretty slow.
Occasionally, the map will clear out and her body will appear. A large boulder will fall onto the ground. The islanders will advise you to hide behind the boulder, which you should do so. You do not want to get hit by this attack at all.
After calming The Spirit down (by beating her), she regains her composure and promises to change for the better. The screen fades to black and the credit plays with some cutscenes in-between!
One Last Decision
Munch and the village girl will be having a picnic. Munch expresses his interest in exploring other lands now that the island is at peace and he has basically fulfilled his role. The Spirit will appear once again. Hearing the village girl wishes, she offers Munch a choice to become a human and live with them, OR stay as lizard guardian.
Neither of the choices will affect your ending, so choose as you please.