I'm assuming you are storing the direction you are facing in a variable, probably "global.facing". If it isn't global.facing, use whatever the variable is, but for purposes of helping you, I'll call the variable global.facing.
Basically, in the create event of the sword, set the depth based on which direction you are facing. Something like this:
if(global.facing == "up")
depth = obj_link.depth + 1;
else
depth = obj_link.depth - 1;
This will say that the sword appears over Link unless you are facing up.
