Story opens 20 years ago on a flying Nipponese ship called "The Emperor's Fancy". Captained by an over confident Samauri named Mikito, the crew is poisoned by a ninja disguised as a sailor. His plot to steal the Emperor's crate is foiled by a loyal Shinto priest, who ignites the balloon which keeps the ship aloft. Below, on the ground, then Prince Rudolfo and his trusted champion Sir Woodward (father of Sgt. T.S.) witness the crash of the ship. None of the crew survives.
In present time, King Rudolfo still can't get the ship off his mind. He attempts to convince the Sarge of its existence, but the Sarge is too much of a yes-man. Just then, Locust barges in with his Magic Specs. The Specs allows him to see great distances and he's just spotted another flying ship! Rudolfo orders the Sarge, Locust and their friends to take their flying carpet and greet the ship.
Our heroes do so, meeting Marco Polo, who is a passenger, and a crew led by Lord Sharona, Wakashi (Mikito's son) and Sharona's daughter, Mi, who is the interpreter. Brother Mu is their priest and Nappa is the rather large bodyguard. Lord Sharona is a beligerant jerk, but his daughter translates his words more diplomatically. Locust is dumbstruck by the beautiful Mi. Shambles insults the flying carpet and spends the rest of the issue stuck in the air.
Rudolfo holds a feast for the crew and the kingdoms strike a bargain for trade, thanks to Mi's translating. After excusing herself early, Locust walks her to her quarters. It's obvious the twosome are fond of each other. From the bushes, however, a dark figure watches.
That night, ninjas break into the palace in search of the Emperor's crate. Instead, all they find is a scroll. One of the ninjas remembers hearing Locust say he was in charge of magic. The ninjas are interupted by the palace guards and are forced to make a daring escape out of the palace.
King Rudolfo beefs up security and the next day the Nipponese are given an embassy. Locust and Mi spend the next few days together. Eventually, the ninjas sneak into Locust's tower to steal the Emperor's crate, but one of the ninjas refuses to kill the wizard. It turns out the ninjas are Mi, Brother Mu and one of the crew. Mi loves Locust and won't kill him.
Mu takes the crate and the scroll and performs a spell releasing the Oni King from the crate. Locust saves Mi, then fights Mu, sending him to the land of shadows. The giant Oni King attempts to step on Locust, but ends up stepping on the flying carpet just as it returns. The carpet flies the Oni King up into the air, killing him.
The next day, Lord Sharona blames Locust for everything. (Only Locust knows she's a ninja.) He forbids Mi to leave the embassy for a year, but Locust watches her from his tower with the Magic Specs.