To get Eduardo's sword back, the first time you enter the sewers you have to choose a side; beggars, or thieves. Alternately, if your Speech skill is high enough you can talk your way into neutrality. Coming in the sewer through the temple entrance is easier for this quest. Enter the sewers, pick a side, or remain neutral. Proceed to the east, where you will find a broken wall littered with corpses of wererats and thieves. Enter the area and go as far south as possible. Note: This is done easier if neutral or on the beggar side. Head to the left until you find a wooden bridge. Cross the bridge and immediately to the right. You will find the beggar who stole the sword. Kill or haggle with him to purchase it for 300 or 100 gold. If you are eradicating all the wererats as a quest, or kill Garcia for the thieves, he is to the southwest of the wooden bridge. Hug the walls to find him.