The Crimson Dye Merchant, whose name is Sao, is an Iki Island vendor who sells red cosmetics for Flowers. Unlike the other dye merchants, you unlock him by winning the Hidden Cove Tournament at Fune's Refuge.
Find his note, then beat the bokken tournament at Fune's Refuge.
Fune
Fune leads the biggest band of raiders left on Iki Island in the expansion. She has no patience for samurai, but she teams up with Jin to fight the Eagle Tribe. Her side story about her daughter Toki is one of the darker threads on Iki.
Tenzo
Tenzo is a raider on Iki Island and right-hand man to the raider leader Fune. He rescues Jin after the Eagle poisons him and becomes his uneasy partner through the Iki Island story. His past with Clan Sakai runs deep.
Ankhsar Khatun
Ankhsar Khatun, called the Eagle, is the main villain of the Iki Island expansion. She is a shaman who leads the Eagle Tribe and uses a mind-bending poison she calls sacred medicine to break the people of Iki. She forces it on Jin early, and he fights her hallucinations as well as her army.
Black Hand Riku
Black Hand Riku is a blind former pirate captain who hides on Iki Island with his armour, the Sarugami Armor. You duel him at the end of the Iki Mythic Tale about his legend, and beating him earns you that armour.