Ressai explains that there are two ways to repair the Izayoi sword. One way is to try to fix it with the steel Ressai has on hand. The other way is to mix in the steel from another sword that is as strong as the Izayoi, such as the Shichishito. However, mixing in the steel from the Shichishito sword may have an effect on the power of the Izayoi that you cannot predict. The heavens have given you a choice. Now choose wisely.
Retrieve the Steel for Ressai!
Objectives: Kill the undead with the Muramasa sword. Using the Muramasa will lower your energy, but it will not kill you. Find the steel and return to the swordsmith.
You're given a choice at the beginning of this mission to use the steel from the Shichishito sword or to not use any new steel. Either choice is essentially correct and has no direct effect on gameplay. The choice affects cutscenes. Make your choice and begin the mission.
As you start the mission, heed the warnings in the briefing objectives. You possess a new sword beginning in this mission (the sword is optional for subsequent missions). This Muramasa sword is effective against the undead--the exact enemy that populates this mission. The catch is that your health slowly drains while you're using the sword. To replenish your health, inflict damage against the enemy--stealth kills replenish the most health. So, you must work quickly to keep your health replenished. There are two more things to keep in mind. The sword won't drain your health to zero; it drains it to one health point, so if you're near death, just don't get hit. And finally, don't bother with other weaponry (shuriken, grenades) against the undead. Use only the sword.
There's an undead beast patrolling the path ahead of you. Wait for him to move to the left, then sneak up behind him and perform a stealth kill. Move around to the left side and spot another warrior on a higher ledge. Leap onto this ledge, sneak down the path, and kill the undead archer from behind.