@lawdog: You can try that 100000 times. The content are set the first time that you enter.
You save (1)before entering the Shallows step in save again (2) run to the chest. there you hide and the combat with nessie is cancelled. You must survive the combat but it only takes 3 or 4 rounds. Open the chest, if you like it load (2) kill Nessie and take it, if you don't like it load (1) and enter again. It will take some hours but Excalibur is really nice
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@armakh: You cannot find the lightsword in that chest. Only the bucaneer ghost drop the lightsword very rare. But it is not so difficult to get like excalibur because what they drop it really randomly. Save before the fight and try some minutes/hours - you will get it. Banish might help you
Wandering around with a fighter having Lightsword and lightshiel is nice
