This is what I do when I need to grind some EXP or refill my health/magic bars...
1. Find a place in a palace where the ceiling drips acid and occasionally those blue jelly guys.
2. Cast life magic on yourself until you are fully healed.
3. Position yourself right at the edge of where they bounce to when they come out.
4. Set your turbo stab key, crouch Link down, and press it.
5. Now, turn on frame skip x10.
Now, make sure you made a save state before this, because sometimes they get lucky and whoop your ass.
Alternatively, you can use one of those overworld places like in the swamp that spawns those annoying ass birds that fly around continually. Just stand at a screen edge and turbo stab away!
I made many a level up this way. Also, they drop a magic container or P bag every 10 kills, so your magic bar should fill back up fast.
ALSO! I see somebody has started a video guide on youtube: http://www.youtube.com/watch?v=K_HxuvqCNaM