Question is If I die in an instanced fight I still get to keep my 3-4 most valuable items.
Do my other items go to a gravestone that can be retrieved for a petty sum from death, or are they still lost for good?

I'm at the end of MM2 and was thinking about taking craw's bow, maybe an amulet of aguish to fight Glough, or maybe some cheap setup If I can loose it all.

well first off, don't use a craws bow on him, Dark bow for specs and MSB(i)/crystal bow is more then fine just watch a guide on how to semi safe spot it

second, you can open up the items kept on death menu to double check in case you are worried about anything specifically

Darkbow is what you want boss pretty easy man maybe watch quick guide but can take very minimal damage using dbow run method