You start the game on level 3 and can't go directly up; the upper levels can only be accessed by entering the cave from the world map.
There's a recovery wellspring on level 4.
Level 1: Leather Cap, Bronze Bracers
Level 2:
Level 3:
Level 4:
The house with the blue roof contains both revive and recovery wellsprings and the inn here is for free.
Phoenix Down (trade for a Potion)
Talk to the blue-robed elder near the entrance after you've talked to Topapa.
Potion (NE)
Near the bottom edge of the pond in the NE corner of the village.
Potion (NW)
Near the top edge of the small pond in the NW corner of the village.
3x Potion
Down the well.
The inn here is for free.
2x $1000
In the SE corner of the village, reachable by the canals.
Find an Elixir and give it to his wife to gain access.
2x $2000, 2x Phoenix Down