Finding mushrooms
When you are mixing mushrooms in your inventory, you will hear a sound. When you are wandering around the same sound will indicated that a mushroom has appeared. You can also wait for the sound to play again to get another mushroom. Note: Listen for that sound when fighting the last Boss.

Defeating the last Boss
Use the following trick to avoid attacks and make your health kits last a little longer when fighting the last Boss. Walk up as close to the posts as possible after hitting them, run a very, very tiny bit to the center of the ring towards the demon, then run back out. The demon will try to bite at you instead of blowing gas at you. Most times, he will bite and miss. Be careful, because after you do this a few times, he will move slightly towards the corner and be able to bite you right through the center of the post -- keep your distance while hitting that post.

Large med-kit
When fighting a Deadite or Hellbilly, turn on your chain saw and slash at them. After a few hits Ash should jam the chainsaw into them and keep it there. Then, use the ax and hit the Deadite while your chain saw is still in them. When they die, they will usually leave behind a Large med-kit. You can also use the other weapons instead of the ax, but it just wastes ammunition.

More mushrooms
When mushrooms appear, collect them, leave the screen, then return to collect them again. Repeat this until they no longer appear.