It seems the prisoners may have taken Link's sword (or left it where it fell in the hallway), but they've left his sheath, for all the good it would do by itself.

If Chara could tell, then it'd be obvious that most of the items in his bag are magical, too. But as they are, just by looking at them, it is just... an eclectic collection of strange, colorful things. But among all of them, are two bags, leather and brown, their openings pulled taught by pieces of string. They're fairly unassuming, except that they're bulging.