Don't miss the free money in the hidden passage before the stairs down.

The monsters down here are mostly fish (weak against Thunder) and reptiles (weak against Ice), so have Yang use the Ice and Thunder claws for maximum effect. Porom and possibly Tella should probably be using a Healing Staff to maintain health at no cost, while Palom and possibly Tella can use the Thunder and Ice Rods as appropriate to supplement damage. Of course, spending MP is always an option too, but be careful not to run out. Cecil basically just hits whatever's in front of him, as usual. Yang can Kick if you like, but note that it's rather slow and gets no elemental bonuses, so he's usually better off attacking normally.

There are some fish that absorb Thunder, though. Physical attacks can't heal them regardless, but avoid magic of that element, and switch Yang off the Thunder Claw when attacking them to avoid a damage penalty.

Be on the lookout for hidden passages along the way, particularly the one in the save room. It's hiding an Ancient Sword, which, while not quite as powerful or accurate as Cecil's Sword of Legend, is non-elemental (sometimes a bonus), gets a racial bonus against Spirits, and may inflict Curse status.

In the EasyType, you'll instead find the Coral Sword, a Thunder weapon as accurate as and more powerful than Cecil's Sword of Legend.

The tunnel ends shortly after the save room, coming out behind....

You can rest in Cecil's bed for free recovery. Take advantage of it.

The castle seems abandoned at first, with even the prisoners missing, but someone calls out as Cecil approaches the central hub.

Beigan approaches from the entrance.

Cecil heads toward the throne room, with Beigan following, but Palom and Porom suddenly stop.

He looks around.

Creepy mutated Beigan and his two creepy mutated arms attack!

He'll recover the arms if you take both out, so consider killing just one. Take your pick; the Right Arm likes to Bloodsuck (damage+HP leak), while the Left Arm may paralyze your characters. Mainly, though, you just need to focus on killing the main body. Note that Beigan will cast Reflect on himself when hit with magic, so if you're going to him hit with a spell, make it count. One of Tella's -ga spells, or Bio from Palom if he's learned it (especially after a few Bravado), are probably the best choices. Pair Cast isn't all that useful in this battle.

I recommend having Cecil and Yang attack mindlessly while Porom and Tella handle healing and buffs. Slow might help too, but with the Reflect counter, it's questionable how useful it really is. Palom can use Bravado a few times before nuking the main body. You can cast Berserk and Haste on the fighters for more powerful and frequent attacks, especially useful in the versions without Bravado to turn Palom into death on two legs. It shouldn't take much effort, really.

One last note: The arms will self-destruct if left without the main body for long. Try to mop things up quickly, and keep your health up just in case.

You can now access the treasures in the eastern stairwell and eastern tower of the castle. In particular, check the pots in the tower basement for an Elixir in the JP and NA versions, or the remarkable Piglet's Bamboo Sword in the EasyType.

Rest up in Cecil's room, then continue to the throne room.

The king disguise drops, revealing a blue... something.

Cagnazzo is a demon from Dante's Inferno. The name literally means either "bad dog" or "big dog".

Cagnazzo attacks! He's some kind of musclebound tortoise, apparently.

He's all about water, so he must be weak against Thunder, right? Well, not exactly. Cagnazzo's weakness is normally Ice, but when he starts charging for a Tsunami...

...it switches to Thunder. Quickly hit him with any Thunder magic to cancel the Tsunami preparation:

This also resets his weakness to Ice. If you don't break his charge quickly enough, he'll get the Tsunami off regardless, so speed is key. Palom and Tella should focus on Tsunami prevention. Keep in mind that the stronger spells have longer cast times. Cast a bit ahead of time, or use the Thunder Rod as an item for an instant effect, though the damage is pathetic. Porom can cast Slow once or twice to delay Cagnazzo's turns somewhat. Meanwhile, Cecil basically just attacks, and Yang should use the Ice Claw and Thunder Claw so he doesn't have to worry about which weakness is active. As before, you can use Haste and Berserk to boost their damage output. Once Cagnazzo's health gets low enough, he ducks into his shell when harmed:

This will boost his defense against physical attacks, but magic still works as usual, and once you get to this point, you've practically won already anyway. Other than Tsunami, Cagnazzo has no noteworthy attacks, so if you can avoid that, defense is no problem. Also note that Tella's Blizzaga or Thundaga will absolutely devastate him if it hits while the appropriate weakness is active, typically taking off well over half his maximum HP.

After the battle, we hear the door open, and someone starts yelling.

Cid walks in, still ranting.

Belatedly, he notices that Cecil is here and the imposter is not.

Cid gets in his face. Porom walks over and breaks them up.

Cid leads the way out of the throne room. Unfortunately, something creepy happens as they reach the antechamber.

The walls start to close in. Cid and Tella try the doors.

The wals continue to close in. Palom and Porom exchange a glance, then nod and move to face the walls on either side of the rest of the party.

The walls keep closing in.

Palom and Porom turn to stone, stopping the walls.

Yes, this means you lose whatever they have equipped. Unfortunately, there's no menu access between the boss fight and now, so anything you want to remove has to come off BEFORE combat with Cagnazzo (or during, for weapons). It's probably not worth it. Just don't leave anything on them you can't replace easily.

Cut to black.

Change scene to where Golbeza still holds Rosa captive. Cain stands guard.

Cain leaves. Change scene back to Baron Castle, where Cid is facing a wall in the central area.

Who didn't understand what? The translators and the line?

Cid opens a hidden passage, and everyone follows him inside. Down several flights of stairs is an underground airship dock, complete with airship.

Cid takes the controls, and the Enterprise lifts off.

Another airship approaches.

Actually, a white flag is normally for a temporary truce, typically for negotiations. There's no one surrendering here.

The other airship pulls alongside the Enterprise.

Cain's airship flies off.

This's conversation is expanded in the ET and NA versions, apparently to help new players: