Ok guys, me and my friend have made it to the moon, and our next dungeon is Benkai Factory. From what I understand you lose the ability to perform Dissolution on Magatama after Kaga's Home. Which is the next dungeon after Benkai Factory. So I ask you what are the materials needed for the quest to gain back the ability to perform magatama Dissolution I heard Orange Glass Mar-balls are one of the items can I get a full list posted if you please?

You need 5 orange glass marbles and 5 blue glass marbles. However, you will get a quest that allows Benkei to take over all of Kaguya's duties once she disappears. (I don't think it makes him appear in any locations he isn't at already, though, so Kaguya being gone is still really inconvenient.)

But after you hand in the 5 orange glass and 5 blue glass you regain the ability to preform dissolution's? Just so you know from what I understand the benkei character only does ornamentation and crafting he still does not dissolve.

If I remember correctly, you need to have Kaguya for it. The mags Wibb mentioned is for crafting Magatama of Isolation so that you can access the dungeon to get her back.