The Magic Urn can be located in the Cavern of the Stolen Fayth. It is an unusual enemy as it will explode when the incorrect eye is attacked, damaging the party. If the party attempts to steal from it, it can kill the entire party with Self-Destruct.
However, if the correct eye is attacked, items are earned. There is no set pattern and is really just based on chance. Magic Urn can only be killed with Yojimbo's Zanmato or Doom, which takes 200 turns to work. If Magic Urn is killed in this fashion it gives nothing as a reward.