Peacock King: Spirit Warrior - Castle of Illusion (1989)

The story starts out at a dig in lake Biwa where archaeologist may have discovered something hidden by the 6th king of evil. The evil king is resurrected and is trying to resurrect an evil demon. Kujaku a priest/monk and friends he meets along the way must discover his own true hidden talents in order to stop the 6th king of evil from making Hell on Earth literally