So… hrm. The Nightmares mucked with the Wind Fish so it wouldn’t wake up. And Link got drawn into the dream world, so he can’t leave without breaking the Nightmares’ hold on the Wind Fish. Considering only those people, it’s easy: screw the Nightmares, save the Wind Fish, and Link’s free. But what about the other creatures of Koholint? So far they don’t seem to be faring too badly in the Wind Fish’s eternal nightmare-infested dream, but that could change. If it were even possible for Link to get away from the island without waking the Wind Fish, how would things be for them afterward? And what about the next poor sap who gets sucked into Koholint accidentally and may have an even harder time leaving than Link?
All in all, waking the Wind Fish, ending the dream, and returning the other inhabitants of the island to nonexistence is the best thing to do, but… I mean…

(xkcd “Nightmares” by Randall Munroe. [CC BY-NC 2.5] [More info])
The final Nightmare assumes a number of different forms, most of which are familiar to Link from his previous adventures. First there’s a giant zol, which is not terribly threatening but immune to just about everything except magic powder. Then come echoes of three bosses from A Link to the Past: Agahnim, a giant moldorm, and Ganon. Then there’s a lanmola that dies pretty quickly, and it’s time for the final form, DethI [1].
DethI is yet another eye monster, with two armed with spiked appendages it swings at Link. So, Link has to play the deadliest game of double Dutch ever [2] while finding time to shoot the eye with arrows. Alternately, one shot from the boomerang does the trick too. Either way, the last Nightmare dies.
“This island is going to disappear… Our world is going to disappear… Our world… Our… world…”
Meet the Wind Fish
A staircase appears in front of Link, and he climbs and meets the owl one last time. The owl explains that it’s part of the Wind Fish, thanks Link for helping free the Wind Fish, and says goodbye.
The Wind Fish then arrives with a godawful trilling sound.
“I AM THE WIND FISH… LONG HAS BEEN MY SLUMBER… IN MY DREAMS… AN EGG APPEARED AND WAS SURROUNDED BY AN ISLAND. WITH PEOPLE, ANIMALS, AN ENTIRE WORLD!
“BUT VERILY, IT BE THE NATURE OF DREAMS TO END! WHEN I DOST AWAKEN, KOHOLINT WILL BE GONE… ONLY THE MEMORY OF THIS DREAM LAND WILL EXIST IN THE WAKING WORLD…
“SOMEDAY, THOU MAY RECALL THIS ISLAND… THAT MEMORY MUST BE THE REAL DREAM WORLD…
“COME, Link [3]… LET US AWAKEN TOGETHER!
“PLAY THE EIGHT INSTRUMENTS! PLAY THE SONG OF AWAKENING!”
Link plays the Ballad of the Wind Fish one last time as a montage of the people of Koholint Island fading out of existence plays. Finally the entire island disappears, and Link is blasted by a spray of water, waking to find himself holding on to a small portion of his ship’s mast. The wind fish flies overhead as Link watches with a smile.
And that’s the end. Does Link ever make it back to Hyrule? Does he die alone at sea, clinging to what’s left of his ship and hoping for a rescue that never comes? I would guess we’ll never know, unless Nintendo decides to make another game with this particular Link someday. There is one final bit of closure: If the game’s completed with no deaths, a winged Marin flies over the The End screen, implying somehow she escaped the island as a bird. The DX version is a little more clear: her face appears in the sky while the Ballad of the Wind Fish plays, and then seagulls appear, suggesting that her wish to the Wind Fish was to become a seagull and fly to other places, as she’d told Link during their scene on the beach, and it was granted.
Final Thoughts
So, that’s Link’s Awakening. I ultimately have it behind A Link to the Past, but in some ways it’s better, particularly the story and characters. And who knows, if I’d played this back when it came out, it might have even overtaken the position of my favorite in the series. There are things I find disappointing/annoying/frustrating, but overall it’s a great game, and the fact that something of this scope and quality made it to the Game Boy is absolutely amazing.
[1] That's a capital I, not a lowercase L. I hate this name – it's like the NES Final Fantasy where they had to cram monster and spell names into a small number of characters, except the name doesn't appear in-game anywhere, so why couldn't they just say "Death Eye" or "Death's Eye" or something readable?
[2] “Look, there’s a gerbil. I’m going up and down. 60 Minutes, where are you? Here’s an exposé for you…”
[3] The sudden lowercase letters in the player character’s name are really jarring here [4].
[4] I guess they expected the player character to be called “THIEF” at that point.