1. ᾗ : Notice the iota subscript and rough breathing, which makes it the dative singular feminine of the relative pronoun ὅς, ἥ, ὅ, meaning "by which (way)" (understand ᾗ ὁδῷ). Don't confuse it with ἦ , meaning "surely," which has no rough breathing and no subscript. So translate "Not by the way which Astyages commanded."
2. κάκιον is the neuter singular comparative of the adjective κακός, used as an adverb (which is normal for the neuter singular comparative of any adjective). So κάκῑον ἢ νῦν means "worse than now."