Is the Granite Sword the rare drop, or the next to rarest drop? -> I don't remember.
Well, it's the renamed Medusa Sword, if you still remember.
Btw, I did say way back that you don't sell Holy/White arrows. The only time you give them is at Mt. Hobs in the treasure chest closest to Chang.
Also, remember why there is a v1.1 of FF2? Well, IIRC, it is either the certain set of enemies.. or the gradual pertrification of the Medusa/Granite Sword vs certain enemies that makes the AI go nuts and lock up the game.
Btw, regarding the Cursed Ring, when do the drops start. I would've thought the Spirit/Soul enemies would drop them.. but either you tweaked it so they don't drop at all, or they drop very very seldomly...