Weapons-
Dug Up
Big Leaf: Forest Entrance, second X on map, ambushed by archers (shoot & run)
Bone Hacksaw: Wedding Crash, just after the tables the with turkey leg and cookie
Candle: The Marsh, after you defeat skeletons and walk past the houses
Carrot: Home Castle, front of the last burning hut
Curved Sword: Sandcastle Wall, midway through the level, there is an x towards top of the wall
Goldbrand: The Marsh, half way through the level you come to a small set of houses. A green knight peeks out of the right door before coming out. You can walk behind the whole set of houses there, Dig in the center near the wall.
Hook Sword: Industrial Castle, towards the beginning after first big machine
Ice Sword: Dig up in Ice Castle, in the screen where the boss appears and disappears with the princess, need Pazzo
Lobster: Tall Grass Fields, dig up on the beach
Sausage: Desert Level (name?) after UFO, first X
Shiny Buster SD:Medusa's Lair right after spear, between the two sets of stairs
Skeleton Leg: Dig up in the Snow Shop (final shop in game), need Pazzo
Spiky Club: Flower Fields, right after the first batch of bees
Thief Sword: Forest Entrance, dug up near the beginning
Umbrella: Tall Grass Fields, dig up in front of the rain dancing miniboss' hut
Enemy Drop
Curved Black Katana: Winged Knight, 2nd to last boss drops it
Black Mace: Drops from skeletons (The Marsh)
Fencing Sword: Dropped by Fencing Knight (Industrial Castle)
Flaming Sword: Dropped by Final Boss
Glowing Green Mace: Drops from the green "Emerald Knights"
Glowing Green Sword: Drops from the green "Emerald Knights"
Harpoon: Drops off of eskimos
Lightsaber: Dropped by Periwinkle Knight, guaranteed drop in cyclops castle
Medusa's Weapon: Beat Medusa, she drops it
Sai: Dropped by the ninja pirates on the ship
Thief Sword: Dropped by Thieves
Unicorn Horn: Kill the unicorn from the painter and hope it drops.
Found
Black Hammer: The Marsh, after you get past the hut, there is a series of gravestones, your goal is to get to the top left most gravestone after the hut and break it
Black Razor: Industrial Castle, behind the bushes before you enter
Fish: Tall Grass Fields, right before you climb the ladder up the mountain, use a sandwich and lift the boulder out of the cave to the left of the ladder.
Fishing Pole: Take the cardinal into The Marsh. You'll get it in the section after where the flying knight is.
Key Sword: Full Moon, the second cottage, have the cardinal pet with you
Pitch Fork: Home Castle, in a haystack
Pointy Sword: Industrial Castle, after you kill the boss, DO NOT grab compass, instead have cardinal with you and go in the area he walked out of (north of compass)
Spear: Medusa's Lair, break all the fish statues, one of them has the weapon in it
Steak: Ice Castle, hanging on the wall on the second or third screen.
Twig Sword: Thieves forest, in a chest when you meet the little pygmy guys...
Wrench: Tall Grass Fields, in the beginning a guy is working on a catapult, behind him.
Purchased
Thin Katana: Castle Keep Store