Where WAS the Blood Sword? I don't think I ever found it.
If you're playing Origins, there are two: the one previously mentioned in Fynn Castle, and the one Pavel gives to the party before entering the tornado. Not sure about other versions, though.
I would suggest paring it with another sword (one in each hand). That way, even if the Blood Sword misses, you'll be doing damage with the other one while leveling up your sword skill. Just don't forget to remove it when undead enemies greet your party. However, if Firion is your white mage, it may be better to leave him in the back row and give it to someone else.