To get the best ending, you must have all 108 characters before you talk to Shu about the Rockaxe mission. Also when you near the end of Rockaxe Castle, when Nanami jumps out to protect you from Gorudo, you must answer very quickly (doesn't matter which answer you choose). If you did this correctly, after Dr. Huan reports of her unfortunate conditon, he should ask to talk to Shu in private.

Did all that? Alright, then once you've beaten the game, head back to Tenzan Path (northwest of Kyaro) and return to that place by the waterfall. Jowy's there, of course, and you'll go into a duel with him. Just keep on defending throughout it. After that, he'll ask you to take his Black Sword Rune. Keep on refusing. Once you've refused enough, Leknaat will appear. I won't spoil the rest, but those are the requirements for getting the best ending.