Have you done everything in territory 8? In this section cacao should have given you the Odd Tune Flute, which will lure out the Killer Snake.After getting the flute and reconnecting the river, head back to Treant and he should give you the Serpent Sword.
As for Goro, show him the Bone Pendant- a cutscene will start talking about how Fudoh really died then Goro will join you (albeit reluctantly).