Wow, my bad. I've gotta start reading better.
There are at least two guaranteed loot chests available on the beach, depending on your choices and exploration before you get to *that* orc fight, plus the contents of the tutorial cave, plus an upgrade to your melee and ranged weapons in a barrel just before the fight.
If you choose to kill the two drunken guards, you will absolutely hit second level before the first group of orcs; if not, then maybe not.
Sounds like you had incredibly bad luck with loot, which is going to happen sometimes in any game with random loot. My apologies for questioning your judgment as well.
