The Light Palace can only be entered once the Gold Isle Key has been obtained. In the city, if go up the wall, loop around the whole city thing and talk to the guy at the end, you will learn that the key has been stolen by a Tasnican spy from Southtown. Mara was a Tasnican, and a spy, AND from Southtown! Board Flammie and visit her. Enter Mara's house and talk to her. She will say that her husband was caught stealing a secret key on Gold Isle and she finds it and will give it to you.
In the first room, beat the two Beast Zombies, and take the Spear's Orb out of the chest. Return to Gold City to forge it, and return. Go to the next room. Fight the Dark Ninja and the Wizard Eye, go through the door and up the stairs, and it is immediately boss time (Blue Spike).
Once you defeat Blue Spike, a stairway pops up. Take it, and you will arrive in a familiar room. Beat the enemies and circle around, up the stairway, to meet Gorgon Bull.
A stairway similar to the one that appeared after defeating Blue Spike emerges out of the floor. Go up. Talk to Lumina, the elemental in front of the pedestal and the girl will gain her power! Seal the seed's powers and use the Magic Rope to get out of here.