She came to the cave mouth, and the little demons who kept it half knew her. "The immortal elder Lingxu is come!"

認得 takes the linking de; 仙長 takes zhǎng, elder. 有些認得 — they half recognise him, the way you half recognise a face you have seen at the door before. So the wolf was a regular caller.

Some ran in to report and some came forward to usher her. The fiend was already out at the door to meet her. "Lingxu! I am honoured that your immortal carriage should deign to call. My poor hut is lit up by it."

蓬蓽有輝, my hut of wormwood and brambles is lit up by your coming, is the standard courtesy of a host receiving a guest of rank. It is the last thing the bear-fiend says as a free creature, and it is a compliment.

The Bodhisattva said, "This humble Taoist respectfully presents one pellet of immortal elixir, and ventures to wish you a thousand years."

小道 is this humble Taoist. 敢稱千壽: 稱 reads chēng, to offer or express. The Bodhisattva of Great Compassion wishes a thousand years to a creature she is in the act of poisoning.

When the two of them had made their bows and were fairly seated, he began to speak again of what had passed the day before.

又敘起他昨日之事 — he wants to talk about yesterday's fight. The narrator does not report a word of what he said.

The Bodhisattva did not answer, but took up the tray of elixir at once. "Great King, look first on the poor mind of this Taoist."

不答, she does not answer. She will not discuss yesterday. 鄙意 is my poor intention — the word for a gift the giver is belittling.

She fixed her eye upon the larger pellet and pushed it across to the fiend. "May the Great King live a thousand years."

覷定 is to fix your eye on something and make sure. She has to look, because the two pills differ only a trifle.

The fiend pushed the other across and handed it to the Bodhisattva. "May Lingxuzi share it with me."

願與凌虛子同之 — may Lingxuzi share it with me. Offered the larger pill, the bear pushes the smaller one back across the table.

The courtesies over, the fiend was just about to swallow when the drug went smoothly down and rolled straight in.

順口兒 carries the toneless diminutive er. 一直滾下: the 一 before second-tone 直 gives yì. Note that the pill does not wait to be swallowed. It goes down of its own accord.

It showed its true form and set itself four-square. The fiend rolled over upon the ground.

現了本相: 相 is xiàng, a form or appearance. 理起四平 is to settle yourself square and balanced — the Pilgrim taking up a fighting stance inside a stomach.

The Bodhisattva showed her own form, and demanded the Buddha-robe of the fiend. The Pilgrim had already come out by way of his nostril.

菩薩現相, again xiàng. Two showings of the true form in consecutive clauses: the monkey inside, the Bodhisattva outside, and the bear in between them.

The Bodhisattva, fearing the fiend might yet turn violent, threw a fillet down upon his head.

箍兒 is a fillet, a metal band. It is the second such band in the novel, and the Bodhisattva puts it on a creature who has just been poisoned and disarmed, because she is afraid he might be rude.

The fiend got up and raised his spear to thrust; but Pilgrim and Bodhisattva were already risen into the air, and she began upon the True Words.

真言 renders mantra, true words. 將真言念起: 將 is jiāng.

The fiend's head ached as before. He threw down the spear and rolled about all over the ground.

依舊頭疼, his head ached as before — the very headache the Pilgrim was complaining of to her three passages back, and for which he came asking her help.

In mid-air the Handsome Monkey King laughed himself double; on the flat earth the Black Bear Fiend rolled himself sick.

A matched parallel couplet closing the paragraph. It carries no 正是 tag announcing it and sits inside the surrounding prose, so it is not set out as verse. 笑倒 against 滾壞: one of them falls over laughing and the other falls over ruined, and the shared grammar makes the two of them a single event.