Unanswered: Does anyone know this movie?

Hi. I've been trying to remember the name of a movie that I saw when I was young.

It was about a young boy and I think a friend of his, also a young boy, who were on a quest to rescue children who I believe were being turned into crows by the bad guy person. On his way he got a sword which could cut through anything and an invisibilty cloak. He finally reaches the castle where the children (as crows?) are flying around. The bad guy has a heart of stone which was the reason for the special sword so that he could kill him.

The setting is a medieval era, similar to the Princess Bride, and I think that it is about the same quality/typish of movie as the Princess Bride, so perhaps it was made around the same time. Does anyone know this movie? Thanks so much!