Before you set foot in the Mystery Manor, make sure you rescue all 13 villagers. If you haven’t rescued all 13 villagers yet, visit Wygol Village, make a list of the villagers you have rescued, then use maps (available at GameFAQs and created by Darth Nemesis) to figure out who you missed and where they are.

If you defeat the Mystery Manor area boss without having first saved all 13 villagers, you’ll get the “bad ending” (i.e. Game Over) when you return to Ecclesia. I learned this the hard way and had to beat the boss twice. Troublesome indeed.