The Cursed Shield

Reward: Great (Paladin Shield)

Recommended level: N/A

NOTE: You can only obtain the shield AFTER the "incident".

As you may have noticed, all the doors in Narsche are locked, so you can't enter any of the houses without Locke in your party. For information on how to get Locke back in your party after the incident, check the Walkthrough. Once you have Locke with you, enter the house you see on the picture to the left. (It is in the upper part of town). 
Once inside, go down the stairs and talk to the poor guy lying in bed. He'll give you an apparently useless shield which actually LOWERS your stats. Now you might say: "What the heck is up with that," but then I'll tell you that any curse can be lifted, including this one.

Once you actually equip the shield and enter combat, you'll notice that the shield doesn't just lower your stats, oh no, it also inflicts all negative status effects you can imagine. The solution to this problem is, of course, the legendary Ribbon (check the Equipment section). You can steal ribbons from the orange dinosaurs in the forest north of the Veldt.
Now it's time to lift the curse. In order to to so, you have to win 255 battles with the Cursed Shield (and the Ribbon) equipped on one of the participating party members. After you've won battle number 255, you'll see the message "Dispelled curse on shield, and the shield will then tranform into the extremely dandy Paladin Shield. Check the Equipment section for the exact stats.

If you're playing FF6 on the original SNES, or even worse on the PSX, which is rumoured to have horrible loading times, well, then you're in for a real challenge. 255 battles sure is a lot, especially if you fight 100 battles before realizing that you forgot to actually equip the shield. There's a way to be certain however: Even with the Ribbon, you can't prevent the countdown you'll see above the character, so if there are strange numbers on screen, you're all set. Anyways, if you play the game on an emulator, you can just speed up the game during the battles and it'll be a breeze. It took me about 20 minutes to win all 255 battles.
So is this Paladin Shield even worth it? I don't know, but this is supposedly the most secret of the secrets in this game, so why not give it a try. There is also a rumour about a Cursed Ring which could turn into the Paladin Ring, but that is only a rumour and it has never been confirmed. FF6 was released in 1994, so if it was true, someone should have found it by now. Have fun :)