Despite your lack of faith in your abilities, Have you tried to fight the sword master anyway/
Also I assume since you killed the shark - you have the tooth.
I looked for my saves and I can't find them.
Found this from Prima Guides.
Gaining Experience
The second of your three tasks is to gain some combat experience. This is a fairly easy task, because Lyle is willing to teach you everything you need to know.
Go to the dock and find Lyle. He's standing on a section of the dock that was previously empty.
Talk to Lyle. He's willing to teach you in three areas: striking, blocking, and dodging.
Practice in all three areas with Lyle. If you do poorly he'll let you know. Try again if he tells you that you're awful; move along to the next area if you've done at least an okay job in the last one.
When you've fared reasonably well in all three areas, challenge Lyle to a fight. If you made the grade in your practice sessions, he'll agree. If you failed in one area or another, he'll refuse and you'll have to practice your weak areas some more before challenging him again.
The final fight with Lyle is comprised of three parts: a sword fight, followed by a brief period of Lyle hurling bottles at you, followed by a final sword fight.
After the fight is over, click on Lyle again. He'll give you his evaluation of your fighting skills and then tell you to go kill the shark.
Laura