The Lute is useful until the end, the sleep spell is powerful and barely anything is immune to it.
There are of course other options for your bard (although not necessary):
use other instruments, cast mage spells, attack from the back with a polearm like the cat o' nine tails, hide and backstab, ...
Excaliber is a very rare random drop, farming for hundreds of hours (for an item you can't even keep for W8) without succeeding isn't worth it.
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